GM to Begin Negotiations on Takeover of Daewoo

General Motors Corp. reached an agreement Tuesday with the main creditor of South Korea’s Daewoo Motor Co. to make an offer for assets of the bankrupt car maker.

“General Motors Corp., Daewoo Motor Co. and the Korea Development Bank, acting on behalf of Daewoo creditors, have reached an agreement to begin formal negotiations regarding the acquisition of passenger vehicle assets and related businesses of Daewoo Motor Co.,” the U.S. auto giant said in a joint statement with KDB.

“The parties will work to reach an agreement on a memorandum of understanding outlining the terms and conditions of the timetable and steps required for the completion of a transaction.”

Confirmation that GM wanted to begin formal takeover negotiations today came after six months of evaluation and business plan development by the world’s top auto maker.

The joint statement said the parties were committed to proceeding with negotiations as rapidly as possible.

Rhee Sung-kun, a KDB executive in charge of selling Daewoo Motor, told reporters GM would submit a proposal to take over Daewoo Motor by today and that the formal talks would take place in a third country.

GM spokesman Rob Leggat said there was no set deadline for the talks to end.

GM shares rose $1.08 to $57.33 on the New York Stock Exchange.