BAW sticks out 924 million USD for Opel
From the WSJ:
MUNICH — China’s Beijing Automotive Industry Holding, or BAIC, made a concrete offer for General Motors Corp.’s Adam Opel GmbH unit, a GM spokeswoman said.
A person familiar with the situation said Friday that BAIC handed in a nonbinding offer valued at €660 million ($924 million) for an equity stake in GM’s Opel and Vauxhall businesses.
Under the plan, BAIC would own 51% and GM would keep 49%, the person said. No plants would be closed in Germany, but jobs would be cut, including staff at Opel’s headquarters.
Meanwhile, German State Secretary Jochen Homann said Friday that Canadian auto supplier Magna International Inc. is the front-runner to take over Opel, but said that the U.S. parent company still has to make the final decision on a deal.
“GM is negotiating with the bidders, not the [German] government,” Mr. Homann said at an industry conference here.
In remarks released Saturday, GM Europe chief Carl-Peter Forster said negotiations for the sale of Opel to Magna were progressing well and could be completed by mid-July.
In May, GM signed a nonexclusive memorandum of understanding to sell a majority stake in Opel and British sister brand Vauxhall to Magna, whose bid is backed by Russia’s Sberbank Rossia and auto maker OAO GAZ Group. Opel’s powerful labor unions have already voiced support for the takeover.
The tentative agreement with Magna is backed by €1.5 billion in bridge financing provided by the German government to keep Opel afloat.
Fiat SpA initially launched a bid for Opel, but failed to win support from the German government. Fiat says it remains interested but hasn’t signaled any willingness to raise its offer.
Tweet This
Share on Facebook
Digg This
Save to delicious
Stumble it
RSS Feed
SAIC ruined the reputation of all Chinese auto automakers, as both GM and German government are deliberately trying to keep BAIC’s bid off the table. They fear that BAIC would loot all Opel tech to China, then file for bankruptcy 4 years later.
Accordingly, Magna is favored over BAIC even if the terms of transaction is less favorable(lower price and higher German government loan guarantee required).