While Thomson Bleeds, Daewoo Waits

On a cold early-December night in Seoul, Daewoo Electronics Chairman Bae Soon-Hun finished dinner and flicked on the TV. He could relax: Prospects for his company, the third-ranked Korean electronics maker, were bright. Six weeks earlier, the French government had approved Daewoo's bid to take over Thomson Multimedia, the consumer electronics arm of state-run defense and electronics giant Thomson. The acquisition would give Daewoo the famed RCA brand and make Bae head of the world's biggest TV manufacturer. But then Bae's secretary called with shocking news: French media were reporting the deal was off. "I couldn't really understand why," Bae told BUSINESS WEEK. "I presumed it was only a suspension, not a revocation."

Daewoo, hungry for a brand name and high technology, still hopes to acquire the French company. And Paris, fearful of worsening already damaged relations with Seoul, hasn't precluded Daewoo from bidding again. A rival bidder was French telecom-equipment maker Alcatel. But as details emerge of French plans to recapitalize and restructure TMM, Daewoo reckons that chances of a takeover--by anyone--are receding.