CANADIAN CAR parts company Magna reacted cautiously yesterday to news that General Motors (GM) had accepted its offer to buy Opel.
The deal, announced in Berlin yesterday, will see 55 per cent of Opel sold to Magna and its Russian partner, the Kremlin-controlled Sberbank. Employees will receive a 10 per cent stake and the remaining 35 per cent will remain with GM in Detroit.
The plan is likely to result in 10,000 redundancies across Europe, with a plant closure in Antwerp and the future of Britain’s Vauxhall uncertain.
“We are not through just yet,” a Magna source told Germany’s Spiegel Online, adding that months of negotiations lay ahead with a deal “only good when the contracts had been signed, and only then”.
The company is speaking from bitter experience: Magna signed a preliminary agreement for Opel in May, two days before GM filed for bankruptcy. After exiting bankruptcy in just 40 days, however, GM dragged out negotiations and began examining other offers.
At one point, the GM board was said to favour a bid from investors RHJ International because it contained an option to buy back Opel at a later date. GM sources then suggested that, given the company’s improved financial position, it might not sell Opel at all.
That set alarm bells ringing in Berlin, where the German government had provided €1.5 billion in loans to keep Opel afloat. It even set up, and took a stake in, a special trust to shield Opel from GM’s bankruptcy proceedings.
So yesterday’s news that GM plans to sell to Magna after all was welcome news to chancellor Angela Merkel.
The usually cautious German leader went all out to back the Magna bid: it would have been a blow to her credibility if the September 27th election had come and gone without any clarity for Germany’s 25,000 Opel workers.
“Our resilience and patience has paid off,” said Dr Merkel, presenting the deal yesterday as a victory for her Christian Democratic Union (CDU), which governs most of the states where Opel has factories.
“I am very pleased about the decision along the lines advocated by the government, and along the lines wished by Opel employees.”
Few details were revealed by GM yesterday, saying it had yet to resolve several “key issues” – understood to concern the Russian involvement in the deal.
GM has asked Berlin to ensure that the €4.5 billion loan it has promised to provide after the sale will not be used in Russia. GM is also seeking assurances about the transfer of Opel intellectual property to Russia.
GM chief executive Fritz Henderson insisted that Detroit’s role in the company would continue, and that Opel would remain “a fully integrated part of GM’s global product development organisation”.
