Germany seeks quick deal on Opel

German government still favors a consortium led by Canada's Magna to take over GM's Opel unit.

By
July 23, 2009 09:33
2 minute read.

The German government said Wednesday that it still favors a consortium led by Canada's Magna to take over GM's Opel unit, and said it hoped for an agreement over the next week with the US auto maker. German officials were meeting with General Motors Co. on Wednesday for an exchange of views on the three final offers for German-based Adam Opel GmbH. Submitted on Monday, they come from the consortium of auto parts maker Magna International Inc. and Russian lender Sberbank; Brussels-based investor RHJ International SA; and China's Beijing Automotive Industry Corp. The meeting at the chancellery involves German deputy finance and economy ministers and GM executive John Smith, among others. It will offer a chance for a "first discussion" after both the government and GM evaluated the offers, government spokesman Ulrich Wilhelm said. The government last week said it had a "certain preference" for the Magna-Sberbank bid. "This assessment ... has been confirmed by our evaluations," Wilhelm said at a regular government news conference. "Our aim in the course of the coming week will be ... to reach a joint assessment and, if possible, a joint recommendation on how to proceed," he said. He said further steps will likely include more talks with GM and the US government, along with "close contact" with the bidders and other European countries that have Opel sites. Wilhelm stressed that the process will continue until the fall, when a deal is expected to close. Opel employs 25,000 people in Germany, about half of GM Europe's total work force. German politicians have been looking to safeguard jobs ahead of elections in September, and the government is a key player in the negotiations because it is offering financial help to make a deal possible. The federal government's preference for Magna is shared by the four German state governments where Opel has plants. "All four states vote for Magna," Hendrik Hering, Rhineland-Palatinate's state economy minister, said Wednesday after conferring with his colleagues in the other regions. "Magna has a strategic concept, management of its own and, with its partners, prospects in the growth market of Russia." The offer would see the consortium acquire a 55 percent stake in Opel that would be divided equally between Magna and Sberbank, with GM retaining 35%. Opel workers would acquire 10% under the new framework. Magna valued the deal at $711.2 million. Details of the offers by BAIC and RHJ have not been disclosed. German employee representatives have opposed RHJ, voicing fears that its aim might be simply to sell Opel back to GM - a charge RHJ has rejected.


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