Opel/Vauxhall future decided soon
July 3, 2009 by David Twomey
While General Motors thrashes out the intricacies of its future in a US bankruptcy court, across in Europe the future of its loss-making Opel/Vauxhall subsidiary also hangs in the balance.
It seems increasingly likely that a majority chunk of GM Europe will end up in the hands of Canadian car parts maker Magna International and its Russian banking partners.
However, GM continues to have a dalliance with other contenders, including Italy’s Fiat and the Chinese carmaker Beijing Automotive.
Reuters Newsagency quotes sources close to the Magna deal as saying the company’s board of directors is scheduled to approve on Tuesday a business plan for the acquisition of GM Europe.
The Canadian car parts supplier and Opel parent General Motors have already clarified most of the major issues in weeks of tough negotiations and they expect to resolve the last few issues holding up the takeover by July 7, the sources said.
At the same time reports say Beijing Automotive Industry Holding Corporation (BAIC) will unveil an improved non binding offer for Opel/Vauxhall.
The German newspaper cited sources close to BAIC for its story. BAIC declined to comment earlier on reports it was going to submit a bid in the coming days.
Meanwhile Reuters says the Magna business plan would serve as the basis for talks with lenders such as Commerzbank, which would finance the takeover, helped by an estimated 3 billion euros (US$4.23 billion) in European state loan guarantees.
Many of the major points still open were clarified at a meeting on June 25 between GM CEO Fritz Henderson, lead GM negotiator John Smith, Magna Co-CEO Siegfried Wolf and Magna Chief Operating Officer Herbert Demel, one source said.
“They came significantly closer to one another in the key points,” the source said.
Talks between GM and Magna have been slowed by disagreements over the use of GM’s technology and engineering designs, rights to Chevrolet in Russia and GM’s attempt to insert a buy back clause into the deal, media reports say.
“The only remaining issue is whether ‘New Opel’ gets the sales distribution rights to GM’s Chevrolet brand for the Russian market, but a solution should be achievable here,” another person close to the talks said.
Magna is the front-runner to take a majority stake in Opel/Vauxhall with a consortium including Russian state bank Sberbank and Russian carmaker GAZ.
Throughout the negotiations GM has said it continues to talk to other potential buyers for GM Europe, including Belgium-based holding company RHJ International and Beijing Automotive.
Once the financing is lined up, Magna and GM would draft a contract that could be signed by July 15.
Majority control over Opel, which also includes plants in Spain and Vauxhall factories in England, is being sold as a precondition to state aid for the German carmaker now that bankrupt GM can no longer afford to finance its foreign subsidiary.
Print it: 
I reckon either TATA or that Russian group will snap up Opel/Vauxhall. And it’ll be to the benefit of the consumer as anyone will be able to run them better than GM did.
I actually hope Fiat snaps up Opel. Then Fiat really would be a world-dominating company, and then maybe the Opel/Vauxhall range could actually be introduced here as a brand apart from crappy Holden! I’d love to see the Insignia here, I feel it could telly sell well, and of course the Astra – it could sell just as well as when it was a Holden. Opel/Vauxhall need to get away from the evil that is GM, their cars are too good!
^I agree Jake.
Everytime I see the new Insignia in pictures, it annoys me that we probably won’t see it here, same for all the new Opel products. Fiat is the only chance for Opel to be launched here Imo. I don’t see Magna going out of their way to launch Opel here, I maybe wrong, I hope I’m wrong.
I just thought of it now…………….but that means no more GM Europe?! No more GM Europe companies. Saab and Opel/Vauxhall gone.
Srry Jake i forgot to include Fiat.
The quicker they get snapped up the better off they will be, it looks like way to good of a car to be wearing a GM/Holden badge anyway.
The sooner they get snapped up the better off they will be, looks like way to good of a car to be wearing a GM/Holden Badge anyway
Insignia and opel badge look much better than holden badge a lot.. or with fiat badge.. Um… interesting…. But pleast i hope not with TATA badge…
Mmmm thanks for that Jon you have written exactly the same as wat i did,your not very original, but you certainly seem to agree with me. But then again I`m wondering if you were going to add anything else?
TSI – TATA would do a THOUSAND times better job than those geniuses at GM ever did in terms of running Open/Vauxhall. IF they were to buy them out, the company would retain the same name, they would not start calling the cars, TATA Insignia LOL. Like is said before, they are not as stupid as GM. People may not like it now, but India’s automotive industry is gaining momentum, and fast, get used to it :).
Haha yeah sorry Charles I was at work and I shouldn`t of been on here and accidently sent my comment. But what I was going to add was I don`t agree, because with a Holden badge we would at least have it here in Australia and the fact we won`t is a dead set shame.
I hope Opel are not bought by FIAT. FIAT are a typical Italian company, poorly run and continualy lurching from one crisis to another. They start distribution in a country and then a few years later, they are gone. They will drown in debt in the US. I noticed with interest that GM are trying to insert a buy back clause into the contract. Now that is of interest.
Hate to rain or your party guys but you can bet that there will also be a “non compete” clause in the contract as well. You can bet that who ever buys GM Europe will not be able to sell in countries where a particular New GM car is sold, i.e we might not see the Insignia here if it competes with a Holden. These sort of clauses are very common when any sort of business is sold.
I hope I’m wrong but…
The Chinese carmaker BAIC has proposed taking a majority stake in GM’s European arm, Opel, with a bid worth 660 million euros.
The Chinese carmaker BAIC has proposed taking a majority stake in GM’s European arm, Opel, with a bid worth 660 million euros ($A1.16 billion), a move that could pep up negotiations for the unit.
BAIC put in a non-binding offer for GM’s Germany-based Opel arm late on Thursday, just before the deadline, according to China’s Guangzhou Daily newspaper, the Financial Times and Dow Jones Newswires.
German newspaper Frankfurter Allgemeine Zeitung reported that BAIC had sent a letter to several members of the German government proposing to take a 51 per cent stake in Opel, with state guarantees of 2.64 billion euros ($A4.65 billion).
In the letter, BAIC chief Xu Heyi pledged “no Opel factory in Germany will be closed”, though job losses were not ruled out, the paper said.
The Chinese company’s offer could put pressure on negotiations already underway for Opel.
The Russian state bank Sberbank is also in the bidding, in partnership with the Canadian auto-parts manufacturer Magna International.
The German government in May announced a rescue plan for Opel, in which 35 per cent of the firm would go to Sberbank and 20 per cent to Magna, but talks have since become bogged down.
According to the FT, RHJ International, a Brussels-based industrial holding linked to the US buy-out group Ripplewood, has also made a non-binding offer.
Fiat is also interested, but has pledged no cash for the stake.
The head of GM Europe has said he hopes Opel will be bought by Magna by mid-July, and that the Canadian firm has a “considerable lead” on other possible buyers, Frankfurter Allgemeine Zeitung reported.
“The only thing remaining is for the details to be agreed” between the two businesses, Carl-Peter Forster told the newspaper.
Forster also said the fact that “there are other candidates that stimulate the process can only help from the point of view of the seller, GM”, the paper reported.