Magna consortium acquires majority stake in GM's Opel
- Source: Shanghai Daily
- [08:25 September 11 2009]
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General Motors Co yesterday said a consortium of Canada's Magna International Inc and Russian lender Sberbank would acquire a majority stake in its European subsidiary Adam Opel GmbH.
GM said it would keep a minority stake and continue to develop vehicles in partnership with Opel.
The deal was cheered by German Chancellor Angela Merkel, who saw it as a jobs saver ahead of September 27 national elections.
GM said key issues, including support from labor unions and a financing package from the German government, would have to be finalized, but it expected the deal to close in the "next few months."
Auto parts firm Magna and Sberbank will purchase a 55-percent stake and GM will hold 35 percent. The remaining 10 percent will go to workers.
"This is what the government wished," Merkel said. "Opel still has a difficult way ahead of it, but I trust the workers will take on the task."
Merkel said talks would be held with other countries where Opel has locations in the coming weeks to ensure the burdens of restructuring could be shared fairly. Germany's lead role in pushing the Magna deal led to fears it would seek to protect its workers first.
"It's possible now that GM and Opel will find a new way in Europe," she said. "We've taken a big step on the way ahead. We can have a new beginning."
Merkel's government favored the Canadian-Russian consortium's bid and offered 1.5 billion euros ($2.2 billion) in bridge financing in May to keep Opel afloat. Magna has promised to keep all of Opel's German plants open.
GM has been trying to unload Ruesselsheim, Germany-based Opel since it ran into severe financial trouble earlier this year. Industry analysts say the unit has too many employees and too much factory capacity for its sales level and its costs are too high.
But Opel's engineers are also highly integrated into GM's global product development system, designing the underpinnings for its future small and midsize cars.
The announcement came after months of wrangling over who was best suited to take on Opel, an auto maker with factories in Poland, Spain, Belgium, Portugal and Britain, where it makes the Vauxhall brand.
"The hard work over the past two weeks to clarify open issues and resolve details in the German financial package brought GM and its board of directors to recommend Magna and Sberbank," said Fritz Henderson, GM's chief executive.
