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GM Daewoo to acquire major Daewoo plant on Sept 30


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Reuters / September 12, 2005 SEOUL -- GM Daewoo Automotive & Technology Co., South Korea's third-largest automaker, will acquire the main plant of the former Daewoo Motor firm on Sept. 30 in a move to boost its capacity, GM Daewoo said on Monday. The Pupyung plant, located in Inchon, west of Seoul, had been left out of the 2002 deal in which General Motors and partners took a majority stake in some of the assets of bankrupt Daewoo Motor. GM Daewoo had previously agreed to buy the plant, which is now operating separately as Daewoo Incheon Motor Co. Ltd., this year when a number of conditions -- including reducing labor strife -- were met. "Our shareholders' meeting decided to acquire key assets and some debt at Daewoo Incheon Motor," GM Daewoo said in a disclosure filing to the Korea Exchange. Full financial terms were not revealed, but GM Daewoo said it would assume debt worth up to $15 million. The acquisition is seen as part of GM Daewoo's efforts to broaden its product line into sedans and SUVs to compete with its bigger rivals Hyundai Motor Co. and Kia Motors Corp. "The acquisition will help boost the production size and enhance our competitiveness," GM Daewoo said. GM Daewoo, which mostly produces sub-compact models, including Matiz, Kalos and Lacetti, has farmed out nearly half its production to the Pupyung facility since it was created in 2002. In August, GM Daewoo reported a 37 percent jump in auto sales from a year ago, helped by continuing robust growth in exports.
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