GM Accepts Three Final Bids for Opel
July 20, 2009
The new General Motors Co. said it has received three final offers for its Opel division in
Germany, without naming the bidders. GM had set a July 20 deadline for final bids.
And then comes the tricky part. GM will examine the bids, present them to the various European government entities who are being asked to help finance the deal and, with their counsel, accept one of the bids.
As the Financial Times notes, however, the best deal businesswise for GM may be at odds with the offer that is in the best interest of the governments, mainly the German government.
While GM did not name the bidders, Canadian auto parts supplier Magna International, with its Russian partner, OAO, Sberbank, reportedly revised its bid, and Belgian finance company RHJ International was wooing German state governments leading up to the deadline. In addition, China's Beijing Automotive Industry Corp. (BAIC) is probably the third.
The German government has blessed the Magna offer. GM is said to be leaning toward the RHJ bid because it is less contentious.
French wire service AFP reported Monday that Magna is demanding the deal include all of Opel's intellectual property rights or it will walk away from the deal. Those rights as well as the distribution of Opel cars in Russia have been sources of contention in negotiations with Magna, with which GM signed a tentative deal in May.
The new Magna offer reportedly includes a shift in ownership. Under the old bid, Magna would own no more than 20 percent and Sberbank no more than 35 percent. Under the new deal, each party receives 27.5 percent, with the pair pooling their votes to ensure majority control. GM would remain the largest shareholder at 35 percent with Opel employees only 10 percent.
In exchange, Magna and Sberbank would invest 700 million Euros; the deal requests 4.5 billion Euros in loan guarantees from European governments. The Magna also includes a commitment to the Vauxhall plants in Luton and Ellesmere Port in the U.K.
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