General Motors, Daewoo Motors Company and the Korea Development Bank, acting on behalf of Daewoo creditors, have reached an agreement to begin formal negotiations on the acquisition of Daewoo Motor Company.
Formal negotiations follow more than six months of evaluation and business plan development. According to GM, both sides are “committed to proceeding with negotiations as rapidly as possible”.
The parties will now work to reach an agreement on a memorandum of understanding outlining the terms and conditions and the timetable and steps required for the completion of a transaction.
A GM spokesman said: “Both sides are hopeful for a successful conclusion and have agreed to keep the content of their discussions confidential during this negotiation process.”
There has as yet been no further confirmation of how much GM is prepared to pay for Daewoo, although the figure could be as low as $1 billion- $2 billion. Daewoo's creditors rejected a bid in 1999 from GM for $5 billion.
A Daewoo Cars UK spokesman said: “Negotiations on a price will be a drawn out process, but it will mean progress nonetheless.”