Korea says GM-Daewoo sale talks in final stage

SEOUL, March 21 Reuters is reporting General Motors Corp's talks to acquire South Korea's bankrupt Daewoo Motor Co have progressed to the final stage, Commerce Minister Shin Kook-hwan said on Thursday.

The world's largest automaker aims to secure a foothold in one of Asia's largest and most insular car markets by finalising a preliminary $400 million deal signed with Daewoo creditors last September.

GM has said it does not want to go beyond April in concluding the deal after more than a year of talks.

``Negotiations with GM have been positive,'' Shin said during a press conference with foreign journalists. ``I have been briefed that the talks are in the final stage.''

He said he expected a decision soon regarding the acquisition of Daewoo Motor.

Shares of Daewoo Motor Sales , the listed marketing arm of Daewoo Motor, closed down 8.9 percent on Thursday on profit taking at 7,170 won, while the broader stock market index ended down 0.21 percent.

UNION DEMANDS

The sales unit's shares closed at their daily 15 percent limit highs during earlier sessions this week on expectations of a looming acquisition deal.

But under a collective bargaining contract Daewoo Motor signed with its unionised workers, the automaker needs union agreement for asset sales and layoffs.

Hardline unionists, fearing a sale to GM would lead to job cuts, are seeking job security, the reinstatement of more than 1,000 workers laid off last year and a clear plan of how the U.S. automaker intends to use Daewoo's main plant, which was not included in the memorandum of understanding signed last year.

GM has said tough issues, including labour opposition, still remained in the talks.

Under the MOU, GM said it was interested in four Daewoo plants, including two overseas.

(Additional reporting by Samuel Len)