GM To Announce Buyout Of Daewoo.(Brief Article)

General Motors Corp. is expected to announce its decision to acquire Daewoo Motor Co. in early May, according to recent statements made by South Korea's commerce minister. GM entered negotiations to buy Daewoo last September after Ford Motor Co. withdrew its bid, but has reportedly been reluctant to continue talks without layoffs at the South Korean company.

A GM spokesperson would not confirm the news citing the confidential nature of the discussions. Daewoo has been under court receivership since going bankrupt in November with an estimated debt of $15 billion.

The South Korean automaker so far has laid off 5,500 of its 16,000- person workforce to sweeten a possible deal with GM. "We expect GM to officially announce its plan to take over Daewoo Motor [in early May]," Commerce, Industry and Energy minister Chang Jae-shik said. "Due diligence is taking longer than expected, but we have learned that GM wants to buy Daewoo."

GM offered no comments on Chang's remarks.

The government has said that Daewoo's creditor banks, most of them government-controlled, would look for another buyer if GM walks away from the deal or offers a bid that is too low. In bidding last year, GM reportedly offered between $3 billion and $4 billion for Daewoo.

Daewoo collapsed during the 1997-98 Asian economic crisis. It can produce two million cars in plants at home and abroad. Despite heavy debts, analysts say Daewoo could help foreign investors penetrate South Korea's closed auto market and serve as a stepping stone into China, a potentially huge market.

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