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RPT-UPDATE 1-India's Tata in talks to take over Daewoo truck arm

(Repeating to South Asian services)

NEW DELHI, Oct 22 (Reuters) - India's biggest truck and bus maker, Tata Motors Ltd , said on Wednesday it had been selected as the "preferred bidder" to buy bankrupt South Korean firm Daewoo Corp's truck unit.

Ravi Kant, executive director of Tata Motors' commercial vehicles business unit, told Reuters by telephone the company expected to sign a preliminary agreement with Daewoo next week and would begin due diligence thereafter.

"We hope to tie up the deal by the end of this calendar year," Ravi Kant said, but declined to say how much Tata had bid.

Daewoo Commercial Vehicle Company Ltd, spun off from Daewoo Motor in November 2002, is the second-largest maker of heavy commercial vehicles in Korea with a market share of 26 percent.

It also produces tractors and other utility vehicles and has been under court protection while its parent Daewoo Motor sold most of its passenger car operations to General Motors Corp and partners last year.

South Koreas's Maeil Business Newspaper said in its early Thursday edition Daewoo chose the Indian conglomerate from a total of 10 bidders for exclusive takeover talks.

It quoted industrial sources as estimating Tata would have bid 100-200 billion won ($85-169 million) for the unit.

Tata Motors, owned by the Tata group, India's second-biggest business conglomerate by sales, has an over 60 percent share of India's truck and bus market.

It is also the country's third-largest maker of both cars and utility vehicles and is drawing up aggressive plans to boost exports and its presence in foreign markets.

Kant said Daewoo mainly made trucks with horse power greater than 200 but also had the capacity to make medium-duty trucks. ($1=1181.8 Won) (with additional reporting by Kim Yeon-hee in SEOUL)