Magna, Sberbank team up in Opel bid
- Source: Shanghai Daily
- [09:22 May 25 2009]
- Comments
Canadian auto parts maker Magna International Inc. says it is joining forces with Russia's biggest lender, Sberbank, in a bid to take a majority stake in General Motors Corp.'s Opel unit.
In a statement released late Friday, Aurora, Ontario-based Magna for the first time offered details of its bid, one of three from companies interested in Opel.
Magna and Sberbank propose to invest a total of €700 million (US$977 million) in Opel, based in Ruesselsheim, Germany. An unspecified portion of that would be guaranteed by the German government, the statement said.
A possible deal would leave Magna with 20 percent of Opel and state-controlled Sberbank with 35 percent, while parent GM would retain 35 percent and 10 percent would go to Opel employees, it added.
The brief statement did not offer further details of the bid or say what the implications might be for jobs or production sites.
Magna submitted its proposal for Opel on Wednesday, along with rival bids from Italy's Fiat SpA and New York-based buyout firm Ripplewood Holdings LLC.
Fiat has said it wants to wrap GM Europe, including Opel and British sister brand Vauxhall, into a global car-making powerhouse along with Chrysler LLC. It says its offer calls for fewer than 10,000 job cuts across Europe.
Yesterday, German Economy Minister Karl-Theodor zu Guttenberg said that Fiat had made adjustments to its plan. He said the changes involved aspects such as risk-sharing and capital contributions, but did not give details.
Fiat CEO Sergio Marchionne was quoted as criticizing Magna's bid in an interview with the weekly Der Spiegel, arguing that despite its Russian connection "we probably know the market there better."
If Fiat wins, Opel workers "would belong to the second-largest auto group in Europe, with big international opportunities for growth and employment, particularly through the alliance with Chrysler," Marchionne was quoted as saying.
But "if Opel doesn't want us, I'm not going to fall into depression," he added, according to the report. "I'm not begging."
Ripplewood has not given details of its bid.
Two governors of German states that have Opel plants said Friday they see Magna's bid as the most promising, but a third termed it unacceptable, arguing that it would lead to too many job cuts in his state.
Frank-Walter Steinmeier, Germany's center-left vice chancellor, signaled that Magna should be given priority, but Guttenberg, the conservative economy minister, named no favorite.
"Magna has put forward a very solid concept," Steinmeier was quoted as telling the Bild daily yesterday. "Now the last questions of detail must be cleared up quickly with GM and Magna so that as many jobs as possible can be preserved."
GM faces a June 1 deadline to restructure or file for bankruptcy. Berlin is keen to ensure the future of Adam Opel GmbH - which employs some 25,000 people in Germany, nearly half GM Europe's total work force.
German officials stress that it is up to GM to choose Opel's investor, while Berlin will decide whether and how to lend state support to the selected bidder.