Just how close is a final deal on GM’s proposed purchase of Daewoo Motor?
Local newspaper reports this week have buzzed with reports from sources close to the talks that hurdles have been cleared and significant progress to closing a deal has been made. But there are clearly some outstanding issues and no one seems prepared to put a firm date on any final signing.
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Lee Young-kook, president and chief executive of Daewoo Motor, told the Korea Herald yesterday “that almost all major differences in talks with GM have been ironed out,” indicating that the signing of the final acquisition contract is imminent.
Comparing negotiations with GM to a housing construction, Lee said: “Key girders and external structures have already been set up. Some of the original MOU contents could be changed.” But he declined to give a specific date for the final contract.
The newspaper reported that an executive of the Korea Development Bank, the main creditor for Daewoo, believes that GM’s acquisition of key Daewoo operations would be wrapped up by the end of April at the latest.
He didn’t want to go on the record.
The newspaper added that according to other creditor and company sources, GM has stubbornly stuck to its demands that the number of Daewoo’s overseas operations to be taken over be reduced from the initially promised 24 to merely nine, due to concerns over hidden debts.
And one other thing. Communication channels between GM and the local labour union may have been opened, but observers reckon there could be some tough negotiations ahead.
