Daewoo Group will take a 53.5% controlling stake in Ssangyong Motor Co. Ltd. Executives from Daewoo and Ssangyong have announced they will complete the agreement before the end of this year.

Daewoo will assume around USD$1 .7 billion of Ssangyong's current loans, which total USD$2.79 billion. Daimler-Benz AG will retain its 2.4% stake in Ssangyong, and Daewoo Group has said that technology and distribution agreements between Ssangyong and the German group will continue, pending an appropriate review.

A Daewoo Group spokesman said Ssangyong's product line is entirely complementary with Daewoo products and will be an excellent mix. Ssangyong makes recreational and cargo vehicles and has recently launched a luxury sedan in Korea.

The Managing Director of Daewoo Automotive Australia, Ric Hull, said: "It is a welcome development, and will present exciting opportunities for Daewoo. It is too early to say what impact the takeover will have in Australia, however Daewoo Group has said it will undertake a complete analysis of Ssangyong's position before proposing any changes to Ssangyong's current business plan."

Chohung Bank, one of Ssangyong's major creditors, has said the takeover will be finalised by December 15, and that Daewoo would assume debts related to capital investments, foreign exchange loans and leasing.