GM might acquire Daewoo Motor

It is expected that the sale of Daewoo Motor will proceed rapidly, as General Motors of the United States announced its intention to acquire the Korean auto maker.

Lee Keun-Young, head of the Financial Supervisory Commission said Sunday that GM officials had told him that they would meet Oh Ho-Keun, former head of the Daewoo Group Restructuring Committee, to discuss the takeover bid for Daewoo.

GM reportedly is planning to submit a letter of intent to the creditors of Daewoo Motor. Oh resigned Friday as head of the Daewoo Group Restructuring Committee.

Lee said that GM was serious about acquiring Daewoo, noting that both parties would decide the price and conditions after basic and precise examination of Daewoo by GM officials.

Ford abandoned its takeover of Daewoo Motor on the eve of signing a contract because of internal problems, but GM is unlikely to cancel negotiation because the company is aiming at advancing into the Asian market by using Korea as a bridgehead.

Daewoo's creditors, including Korea Development Bank and Hanvit Bank, also plan to prepare for partial sale of Daewoo as there is a possibility that GM will take over some of Daewoo's overseas plants or specific business units.

Meanwhile, officials of Korea Development Bank, which led Daewoo's sale said that it took Ford three months from submission of MOU through a final decision for purchase. So, they said it is too early to be optimistic because an LOI is only a ceremonial step and there remain a number of steps before the final contract.