VAUXHALL and Daewoo will become sister companies in the UK, after General Motors signed a memorandum of understanding with Daewoo Motor Corporation to buy a 67% controlling stake in the troubled South Korean manufacturer.

The takeover covers two factories in Korea, one in Egypt and one in Vietnam, as well as 21 sales companies in Western Europe (including the UK), North and South America and Australia. GM has agreed to continue to employ the staff of the Daewoo companies.

GM will start due diligence proceedings immediately. The remaining 33% of Daewoo Motor Company will be owned by Daewoo's creditors.