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Chinese bidders interested in Opel

By David Twomey |

Chinese bidders are among investors interested in buying a stake in General Motors’ Opel and Vauxhall brands, according to newsagency sources familiar with GM’s negotiations about the future of its European operations.

The sources told Reuters newsagency that Chinese companies were among several investors eyeing Opel/Vauxhall. Others were European industrial groups and sovereign wealth funds.

One source also told Automotive News Europe that GM is talking with “credible” potential investors in the brands including Chinese groups.

Four financial and two strategic investors are in talks with GM to buy a possible majority stake of Opel, which would involve an investment of at least 500 million euros (US$649 million) in direct equity, a banker close to the negotiations told Reuters.

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The source confirmed a report in the Financial Times that half a billion euros was the absolute minimum expected.

None of Germany’s carmakers nor Italy’s Fiat SpA, which had been repeatedly named by the media as a potential partner for Opel, was involved in the sale process, the Reuters source said.

The banker also said well-known private equity firms were among the parties interested in Opel. However, they would have to rely on traditional capital gains from a successful restructuring of Opel rather than a classic leveraged buyout.

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Sovereign wealth funds, by comparison, could be more interested since they rarely seek management control and mainly purchase minority holdings.

GM is carving out German-based Opel and its British sister brand Vauxhall into a separate unit and is seeking outside investors for the unit.

GM CEO Fritz Henderson said on Friday that confidentiality agreements have been signed with six groups interested in buying part of Opel/Vauxhall.

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To prevent future liquidity problems, Opel has requested loan guarantees of 3.3 billion euros (US$4.34 billion) from governments in European countries where it has factories.

German Chancellor Angela Merkel has made the approval of any such guarantees from Germany conditional on finding outside investors.


 
  • http://skyline The Salesman says “Horry Sheet”

    And why not. As i have said before “Expand or die” We are going to see a huge shift in the top 10 automakers and i expect China will have one soon. If you cant win, buy out everything else you can.

  • Yanzo

    so, what, is holden gonna be run by the chinese?

    haha i’m the first to leave a comment!

  • Yanzo

    no… someone beat me!

  • Frontman

    Isn’t it funny, look at one area of the news and Chinas car makers are suffering like the rest of us and are down scaling and shedding workers etc, (including holding off from export markets read Cherry). Then when you turn the page, every time another manufacturer is being put up for sale it’s the Chinese that are supposedly interested in it! Somehow this is starting to reak of lets just throw some names about and those that don’t deny must be guilty.

  • Who’s Next

    Maybe the Chinese will buy Holden………..i will laugh then…….Commodes with special fried rice!!!!!!

  • RoFlmaTiC

    Chinese investors and Chinese auto-manufacturers are not necessarily the same entities Frontman.

  • gearboxdawg

    China’s local manufacturers are going global. It is bottom feeding rather than top feeding. Tata Motors from India bought out Jaguar and Land Rover.

    A couple of years ago, Nanjing Auto bought out Rover Group’s MG brand.

    I don’t see Chinese auto-makers owning any part of Holden. China is a low cost manufacturer which would keep their manufacturing in low cost ares. If they do buy Holden, its because of the badge to retain local customers and not anything else.

  • Murano

    Low technology manufacturer buying a high technology manufacturer – excellent leapfrog strategy. Plus the Chinese have the capacity to learn fast. Reminds me of Isuzu which has its roots in Opel.
    I think the Chinese will progress well in automobile industry due to the big local market aided by low production cost. I’m not surprised if in 5-10 years China becomes a major player. Only time will tell.
    For now, Chinese made cars are awful.

  • Lukaas

    Murano,

    You are not wrong…
    “Sources” as in industry people who have travelled to China and in particular the plants (automotive) have revelled on how surprisingly “sharp” they have become.
    [A] Chinese do learn fast, they have the skills, just lacking experience.

    [B] They have access to very very low production cost, labour rates at about a quarter that of a typical Australian worker… HUGE advantage.

    [C] Higher work rates, not only do they get paid less, but most labourers are willing to work extra to make a living.

    The main drawback is that “piracy” is still HUGE over there, a plant can be “supervised” and ran by a corporate that has top notch security but a month later you will see that same “secret” they supposedly hide out in the streets being produced by a dodgy company without quality standards…. it “kills” reputations and product quality.
    Look at the computer part market… Chinese produces cheap parts, initially was very poor in quality but now… not bad at all…

    Still, Japan are too “knowledgED” and experienced to lose out… in the next 20 years anyways.