GM to Join Partners to Control Daewoo Units

General Motors Corp. said it intends to join partners, including a group of South Korean banks, to take control of most key units of bankrupt auto maker Daewoo Motor Co.

The $597-million cash deal would give the partners a 67% controlling stake. GM would gain entry to the potentially lucrative South Korean market and strengthen its Asian strategy.

GM would allow Daewoo’s struggling U.S. unit, Compton-based Daewoo Motor America Inc., to continue operating as a stand-alone business. There had been widespread speculation that the U.S. company would not survive a GM takeover.

GM spokesman Jerry Dubrowski said the company wants Daewoo principally because it makes high-quality, low-cost cars that sell well throughout Asia. GM owns stakes in the makers of the Isuzu, Suzuki and Subaru brands in Japan, but Daewoo is considered stronger in some Asian markets and would give GM a new gateway to China.

A formal acquisition agreement still must be worked out, but GM, Daewoo and the Korean Development Bank signed a memorandum of understanding that calls for GM to acquire Daewoo’s overseas sale units, four of its 11 manufacturing plants and its parts and service operations.

GM shares fell $2.68 cents to close at$40.70 on the NYSE.