Germany’s economics minister has ruled out any attempt by General Motors to include an option to buy back majority control of GM Europe, which produces Opel and Vauxhall vehicles, as part of a deal to give up more than 50 per cent of its German subsidiary in exchange for state aid.
“This is incompatible with our views and cannot happen,” Karl-Theodor zu Guttenberg told German Sunday newspaper Frankfurter Allgemeine Sonntagszeitung in an interview.
Reuters Newsagency says the comments could suggest that Belgian financial investor RHJ International may have problems with its bid if the company is viewed as only a short-term player.
Germany is expected to shoulder the bulk of the billions in loan guarantees as part of a deal, and state and federal governments are represented on the board of a trust that has to approve a sale of Opel.
The minister also warned bidders for Opel will have to invest more of their own capital for the package of state aid to obtain EU clearance, since otherwise the only ones risking anything are taxpayers.
Mr Guttenberg explained that the size of the state aid requested would not be the deciding factor alone for Berlin.
“That’s too simple. What good is an offer that is cheap (to the taxpayers) if the return of the money is in question?
“The key will be if a concept is so sustainable that there is a high probability that the interest, fees and the money can be paid back,” he said.
When asked what was sustainable he responded: “A competitive company that urgently addresses the need to consolidate (capacity and staff).”
Magna International, RHJ and Beijing Automotive (BAIC) have been in a race to acquire Opel, with final binding offers due at the close of business in Europe today.
BAIC has requested only 2.64 billion euros in state aid, while RHJ wants 3.8 billion and Magna 4.5 billion, but the Canadian supplier is seen as heavily favoured within Germany, a country where the short-term horizon associated with financial investors is viewed with suspicion.
Magna’s board of directors was expected to approve its takeover plan for Opel at a meeting yesterday evening.
Some executives at GM, unhappy about losing control over Opel, are pushing for a deal with RHJ in part because of the higher likelihood that the US company could reacquire control over its former German subsidiary, sources familiar with the talks told Reuters.
Magna’s co-CEO, Siegfried Wolf, has unwavering support from Opel’s labour leaders, regional governments that are home to the carmaker’s plants and Germany’s junior coalition partners, the left-leaning Social Democrats.
German Chancellor Angela Merkel said last week that the bid from Magna’s Russian-backed consortium offered “excellent starting points,” and a day later her spokesman said Berlin had a “certain preference” for the concept.