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Business

GM receives three bids for Opel

Text by NEWS WIRES

Latest update : 2009-07-20

General Motors has claimed that Canada's auto parts maker Magna, investment fund RHJ and China's BAIC have all submitted final offers to buy Opel, GM's European subsidiary. It is hoped that a decision will be reached in a few days.

AFP - Canadian auto parts maker Magna, Belgium-based investment fund RHJ and China's BAIC have all filed formal bids to take over General Motors' 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.
  
A spokeswoman for the firm later told AFP that Magna, BAIC and RHJ were the three companies in question.
  
While the final decision lies with GM, the German government is involved as it is set to stump up billions of euros (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, told AFP the regional government hoped the final decision could take place by the end of this week.
  
Berlin has made clear that it favours Magna, with 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.
  
The Canadian firm confirmed Monday that it had submitted a slightly altered bid.
  
Magna and Sberbank will each purchase a stake of 27.5 percent while previously Magna had only declared itself ready to acquire a 20 percent stake. They still seek 4.5 billion euros (6.4 billion dollars) in state guarantees.
  
In addition, Russian business daily Kommersant reported earlier Monday that Magna would also demand that GM include intellectual property rights as part of any deal.
  
Citing a source, Kommersant said "the offer will be made in the form of an ultimatum: either GM sells Opel with the rights to use all of its intellectual property" or the consortium leaves the negotiating table.
  
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. The German government said in May that Magna's plan involved around 2,600 jobs shed in Germany, with a further 8,500 elsewhere in Europe.
  
BAIC's preliminary offer is valued at 660 million euros and it asked for 2.64 billion in German government guarantees.

Date created : 2009-07-20

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