(Updates with closing share price, adds earnings forecast)
By Edwina Gibbs
TOKYO, June 25 (Reuters) - Japanese minivehicle maker Suzuki Motor Corp said on Tuesday it had agreed to take a capital stake in a new Daewoo Motor Co, a move that should help it expand in Asia and share vehicle development costs.
Suzuki said in a statement that a basic agreement had been reached with General Motors Corp , which owns 20 percent of the minivehicle maker, to invest in a new firm that will take over the assets of the failed South Korean car maker.
It said it was still considering operational cooperation but declined to give further details.
The move was flagged by the company earlier this month. Local media reports have put Suzuki's planned stake at around 15 percent, costing 10 to 15 billion yen ($82.22 to $123.3 million).
In April, GM agreed to capitalise the new company through a $251 million cash investment, giving it the largest stake in the venture of 42.1 percent, with its business partners holding 24.9 percent.
Altogether, the investment by GM and its partners is expected to total $400 million.
The new Daewoo will operate two plants in South Korea and a car factory in Vietnam. It will also take over eight sales units outside Korea -- seven of them in Europe and one in Puerto Rico -- and a parts unit in the Netherlands.
Although the reported size of the stake is somewhat larger than expected, analysts have largely reacted positively to a likely Suzuki stake in Daewoo, saying it would allow small car maker to expand in Asia for a relatively small investment.
"In the medium- to long term, there's the benefits of cutting costs through sharing parts and platforms, and there is also potential for Suzuki to use Daewoo's factories as Suzuki is pretty much running at full capacity in Japan," said Tatsuo Yoshida, an auto analyst at Deutsche Securities.
Yoshida added that by taking a stake in Daewoo, a rival in many of the same markets in developing countries, Suzuki would also be able to control competition to some extent.
But analysts also said that, in the short term, helping to rebuild the failed company could strain resources.
Fiat SpA , which joined GM in submitting a letter of interest in October 2000, was widely expected to be the largest stakeholder after the U.S. automaker but the Italian industrial group is now in trouble after its car unit suffered an operating loss in three of the last four years.
China's top automaker, Shanghai Automotive Industry Corp, also said this month it was in talks about joining GM's purchase of Daewoo assets. This would be the first time a major Chinese automaker has bought a stake in a foreign firm.
REVISED EARNINGS FORECAST
Suzuki also slightly raised its earnings forecast for the year through next March, reflecting the recent increase of its stake in India's Maruti Udyog Ltd, a joint venture with the Indian government.
The Japanese maker said it now projects group current profit of 69 billion yen ($567.3 million) on sales of 1.98 trillion yen for the year through next March, against the previous estimate of 68 billion yen profit on 1.76 trillion yen sales.
Current profit is pretax and excludes extraordinary items.
Last month, Suzuki gained control of the biggest automaker in India by lifting its stake to 54.2 percent from 50 percent, enabling it to respond more quickly to intense competition in potentially one of the largest car markets in the world.
"Since Maruti became one of our consolidated firms, we made an adjustment to fully reflect the Indian operations' sales and profits in our group earnings," a Suzuki spokesman said.
Suzuki shares closed up 1.09 percent at 1,485 yen, outperforming a 0.24 percent rise in the benchmark Nikkei average. ($1=121.62 Yen)