Fiat Could Be Set To Take Stake in GM's Opel
April 23, 2009
By Michelle Krebs
General Motors appears set to shift a majority stake in its German unit
Opel, possibly to Italy's Fiat, though GM is in talks with other potential investors as well, according to European media reports Thursday morning.
GM also is talking to other parties, including Magna Steyr, the Austrian unit of Canadian auto supplier Magna International, reports say.
GM could sign a letter of intent with one of them as early as Tuesday.
Reuters is reporting that Opel's works council chief told German news agency dpa that Fiat was poised to take over Opel, confirming a report by German magazine Spiegel Online that said Fiat would sign a letter of intent on Tuesday.
GM needs to offload a big stake in Opel, which it indicated this week it would virtually give away, in order to obtain $4.3 billion in loan guarantees from the German government.
Fiat has repeatedly denied interest in Opel. Despite rumors to the contrary, Fiat Chairman Luca Cordero de Montezemolo only last week said the Italian automaker had no interest in Opel. Still, he also said Chrysler would not be the only partnership that Fiat would pursue.
Meantime, Fiat is also pushing to meet a deadline of next Thursday to also close a deal for an alliance with Chrysler. As it stood Thursday, Chrysler's lenders were balking at making any concessions on the automaker's debt to meet the deadline imposed by the U.S. government and a counteroffer to lenders was being made. Among the lenders complaints was the fact that Fiat intended to bring no cash to a Chrysler alliance, taking a 20 percent stake by providing small-car platforms and fuel-efficient technologies. It appeared Thursday morning that Fiat might be willing to ante up some cash to get the deal done.
Some analysts in Europe speculate that if the Chrysler deal fails, Fiat may turn to GM for an alliance, though how it would finance such a deal, when Fiat reported a first-quarter loss, remains to be seen.
At the same time, GM reportedly is in talks for an Opel stake to be taken by Magna Steyr. For at least two decades, Magna International has expressed interest in going beyond providing parts for vehicles and being an assembler. Magna was among the bidders for Chrysler when Daimler AG put it on the auction block in 2006, with private equity firm Cerberus Capital Management ultimately winning the bid for the American automaker.
Reports from Europe, however, say Germany's economy ministry preferred GM make a deal for Opel with Fiat.
Posted by Michelle Krebs at 5:58 AM under Companies , GM , In the Media , Rumors | Comments (0) | digg this | Seed Newsvine
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