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Wed, Jul 22, 2009 - Page 10 News List

GM Europe evaluates Opel bids


Canadian auto parts maker Magna, Belgium-based investment fund RHJ and China’s BAIC (北京汽車工業) have filed formal bids to take over General Motors’ (GM) struggling subsidiary Opel, GM Europe said on Monday.

“General Motors confirms that it has received final offers for a stake in Opel/Vauxhall from three bidders. The final bids will now be analyzed and compared by GM,” GM said in a statement.

While the final decision lies with GM, the German government is involved as it is set to stump up billions of dollars in loan guarantees to sweeten any takeover deal in a bid to save tens of thousands of jobs.

Speaking at an earlier regular briefing, government spokesman Ulrich Wilhelm said Berlin’s Opel task force would examine the bids once they had been officially tabled.

“We will then assess the offers in the coming days and then jointly make a decision about further action,” Wilhelm said, adding the government would stay “in close contact” with GM.

A spokesman for North Rhine-Westphalia state, where Opel employs 5,000 people at its Bochum plant, said the regional government hoped the final decision could take place by the end of this week.

Berlin has made clear that it favors Magna, with German Chancellor Angela Merkel saying as recently as last week that the Magna bid “offers Opel a chance” and presents “excellent departure points.”

In late May, the German government agreed to support with cheap loans and loan guarantees a bid for a majority stake in Opel by Magna, which has teamed up with state-owned Russian bank Sberbank and automaker GAZ.

Magna and Sberbank will each purchase a stake of 27.5 percent. They still seek 4.5 billion euros (US$6.4 billion) in state guarantees. In addition, Russian business daily Kommersant reported earlier on Monday that Magna would also demand that GM include intellectual property rights as part of any deal.

For their part RHJ is seeking 700 million euros less in state guarantees than the Magna deal and would buy a 50.1 percent stake for 275 million euros, according to a draft of the offer seen by Dow Jones Newswires.

RHJ is thought to be planning around 8,100 job losses Europe-wide.

BAIC’s preliminary offer is valued at 660 million euros and it asked for 2.64 billion in German government guarantees.

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