GM, Daewoo to Sign Takeover Deal

SEOUL, South Korea AP is reporting that U.S. auto giant General Motors Corp. will sign a $1.2 billion deal to take over South Korea's Daewoo Motor Co. early next week, creditor banks of the South Korean carmaker said Wednesday.

"We plan to sign the deal next Tuesday," said Shim Sang-hoon, a spokesman for Daewoo's main creditor, state-run Korea Development Bank.

Kay Lee, a GM spokesman in Seoul, confirmed the plan, and said that GM Chairman Jack Smith is planning to travel to South Korea to sign the contract.

GM signed a preliminary deal to take over Daewoo for $1.2 billion in September, hoping to complete the sale by the end of last year. But negotiations dragged on because of differences over financial details.

The long-awaited GM-Daewoo deal is expected to boost foreign investor confidence in the South Korean economy, which is expected to recover strongly from last year's global economic slowdown.

The acquisition would give the Detroit-based GM production bases in Asia, the world's fastest growing auto market.