GM board refuses to accept Canada’s Magna as Opel winner (Lead, changing dateline)
August 22nd, 2009 - 3:06 pm ICT by IANSBy Gurmukh Singh
Toronto, Aug 22 (IANS) General Motors Friday postponed its decision on whether Canada’s Magna International was the winning bidder for its Opel brand.
Magna, which is the world’s third largest part maker, and the Savings Bank of the Russian Federation (called Sberbank), had jointly submitted a bid in July to acquire a 55 percent stake in the troubled General Motors’ Opel.
Brussels-based financial investor RHJ International is the rival bidder. Two other bidders - Italy’s Fiat and China’s Beijing Automotive - opted out of the fray.
Opel is on the block as the ailing General Motors, which has received $50 billion bailout from US and Canadian governments, undertakes massive restructuring plans.
At their meeting Friday, GM’s board of directors failed to come to a decision whether to accept the winning bid by the Canadian auto company and the Russian bank.
“The GM Board of Directors met today to discuss options for Opel. No decision was taken,” a statement by the auto giant said after the meeting.
The German government has given its financial backing for the joint bid by Magna and the Russian bank.
But reports said GM’s new appointed board of directors wants to know from the German government about financial backing for a rival bid by RHJ International.
Magna and Sberbank have offered $775 million to acquire a 55 percent stake in Opel and its UK unit Vauxhall. GM will retain 35 percent, and Opel employees acquire 10 percent under the deal.
But GM chief negotiator John Smith reportedly has reservations about Magna’s offer because it will give its Russian partner access to GM intellectual property and control over some of its Chevrolet operations in Russia.
Magna’s consortium with the Russian bank has the backing of the US, Canadian and German governments because of the emerging middle class in Russia which could fuel Opel’s long-term recovery.
Being the majority stake holders in GM currently, the US and Canadian governments also have a big say in the bidding process.
The German government is also a big player as it negotiated and underwrote a deal to transfer Opel assets to a new company before the GM bankruptcy.
- Opel decision only before Frankfurt auto show - Aug 26, 2009
- GM board reluctant to sell Opel to Canada's Magna - Aug 25, 2009
- GM executives, board, split over Opel fate: Report - Aug 22, 2009
- Canada's Magna, Russian bank bid for 55 percent stake in Opel - Jul 22, 2009
- GM to sell off its Opel subsidiary - Sep 10, 2009
- GM to sell off 55 percent of Opel subsidiary (Lead) - Sep 11, 2009
- Russia's Sberbank insists on technology transfers with Opel sale - Sep 19, 2009
- GM U-turn shocks Berlin and Moscow, angers workers - Nov 05, 2009
- Head of GM Europe may join Tata motors: Report - Nov 07, 2009
- Opel, Vauxhall bankruptcy staved by Obama deal - May 30, 2009
- GM confirms to keep Opel, scraps Magna deal - Nov 04, 2009
- Russia's GAZ confirms interest in Opel - May 12, 2009
- Fiat doubts about future of GM's German operations - May 09, 2009
- GM files for bankruptcy, to eleminate over 30,000 jobs (Second Lead) - Jun 01, 2009
- GM has found buyer for Hummer: Report - Jun 02, 2009
Tags: auto company, bailout, canadian auto, canadian governments, chief negotiator, financial investor, general motors, general motors opel, german government, german governments, gm board of directors, gurmukh, john smith, magna international, majority stake, rhj international, russian bank, s board, sberbank, stake holder