SEOUL -- Germany's Continental AG has dropped out of a race to buy South Korean auto parts maker Mando Corp., cutting the bidders to three including Siemens and Hyundai Motor, a Mando official said on Friday.
Unlisted Mando has been put up for sale by its majority shareholder -- a consortium between buyout firms JP Morgan Partners and Affinity Equity Partners -- after it paid $446 million in 2000 for a 72.3 percent stake in the Korean firm.
The consortium has been reported to want between $1.5 billion and $2 billion for the stake, representing a return of more than three-fold on the investment.
A preferred bidder is now likely to be picked from South Korea's top automaker Hyundai Motor, German engineering group Siemens and Michigan-based TRW Automotive Holdings Corp., the official said by telephone.
"Continental dropped its bid but the reason is not known," he told Reuters, declining to be identified.
Continental and JP Morgan Partners could not immediately be reached for comment.
Mando, which produces brake and steering systems, sells about 70 percent of its product to Hyundai and its affiliate Kia Motors Corp. Hyundai expressed its intention in September to buy the auto parts maker.
But the deal has been delayed, mainly because of a pricing gap, industry watchers say.
Separately, Siemens and Hyundai teamed up to buy a controlling 43.24 percent stake in another South Korean car parts maker, Hyundai Autonet, in July for $231.3 million.
They also on Tuesday set up a joint venture called Carnes, to make brake systems.
It was not clear if the companies would join forces again for the Mando deal. A Hyundai spokesman declined to comment on a possible partnership with Siemens for Mando.
Mando, which posted 1.4 trillion won ($1.34 billion) sales in 2004, went bankrupt in 1997 in the wake of the Asian financial crisis.