GM exec: No preferred bidder for Opel yet

The Associated Press ~ staff The News
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BERLIN - The chief negotiator for General Motors Co. said that there is not yet a preferred bidder for Germany's Opel though the negotiations are "coming to a point of decision."
In a post on the company's blog, John Smith, GM's group vice president and chief negotiator on the sale of Opel, wrote that "despite media reports to the contrary, GM has not specified its preference for a bidder."
Smith's post , confirmed by GM Europe, said GM is still in talks with a consortium of Magna International Inc. (TSX:MG.A) and Russian lender Sberbank, along another bidder, Brussels-based investor RHJ International SA.
"After months of intense negotiations, we're coming to a point of decision on a bid for Opel/Vauxhall," he wrote.
"To say it's been an intense negotiation would be a dramatic understatement."
"This is a complex negotiation and we're working with highly complex issues. Both bids being developed bring both opportunities and challenges both bids vary in how they would be implemented," Smith wrote.
"But we remain fully open to reaching a satisfactory conclusion with either bidder."
Opel employs about 25,000 people in Germany, about half of GM Europe's total work force. German politicians have been keen 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.
On Tuesday, Roland Koch, the governor of the German state of Hesse who has been involved in the talks, said that Magna was prepared to put euro350 million into Adam Opel GmbH immediately after taking a stake, rather than the euro100 million initially planned.
Opel is based in Ruesselsheim in Koch's state.
"Magna is more expensive in its concept, but at the same time more promising for the future, because they are saying: 'we want to enter new markets,"' Koch said.
Last week, Magna said its plan called for it and Sberbank each to take 27.5 per cent of Opel, while 35 per cent would remain with GM and 10 per cent would go to Opel employees.
Smith said that the bid presented to it differed from previous talks, adding that it "contained elements around intellectual property and our Russian operations that simply could not be implemented."
He did not elaborate on what those issues were but said that GM "has partners in other parts of the world who have joint ownership of these assets .. we simply could not execute the deal as submitted."
As for RHJ, Smith wrote that its bid was complete and "would represent a much simpler structure and would be easier to implement."
RHJ has not disclosed the contents of its bid. The third bidder, China's Beijing Automotive Industry Corp., appeared to be more or less out of the running.

Organizations: General Motors Co., Sberbank, Magna International Inc. TSX RHJ International SA. Adam Opel GmbH Beijing Automotive Industry

Geographic location: Germany, GM Europe, BERLIN Hesse Ruesselsheim China

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