Wednesday July 22, 01:23 PM
German govt says still prefers Magna's bid for Opel
BERLIN (AFP) - The German government still prefers the bid of Canadian auto parts firm Magna to take over struggling General Motors (NYSE: GM - news) subsidiary Opel, a spokesman said Wednesday, following an initial assessment.
Berlin had already expressed a preference for Magna's bid, backed by Russian bank Sberbank, before receiving other offers from Belgium-based investment group RHJ International (Brussels: RHJI.BR - news) and Chinese company BAIC, spokesman Ulrich Wilhelm told a regular briefing.
"This assessment ... has been confirmed following our examination (of the bids)," he added, following a meeting of the government's "Opel task force" with GM executives,.
While the final decision lies with GM, the German government is involved as it is set to stump up billions of euros (dollars) in loan guarantees to sweeten any takeover deal in a bid to save tens of thousands of jobs.
Berlin and GM "want to come to a joint assessment in the coming weeks," with the hope of wrapping up the already lengthy saga in the next few months, he said.
"You know that the federal government is not the seller. At the end of the day, we can only decide about the loans and loan guarantees. The seller is GM.
"Conversely, a sale can only occur in a sustainable fashion after the governments in Europe assure these loans and guarantees," he added.
In late May, the German government agreed to support with cheap loans and loan guarantees a bid for a majority stake in Opel by Magna, which besides Sberbank has also teamed up with Russian automaker GAZ.
Magna and Sberbank will each purchase a stake of 27.5 percent. Previously Magna had only declared itself ready to acquire a 20 percent stake. They still seek 4.5 billion euros (6.4 billion dollars) in state guarantees.
Russian business daily Kommersant reported on Monday that Magna would also demand that GM include intellectual property rights as part of any Opel deal.
For their part, RHJ International is seeking 700 million euros less in state guarantees than Magna and would buy a 50.1 percent stake for 275 million euros.
RHJ International is thought to be planning around 8,100 job losses Europe-wide in the Opel business. The German government said in May that Magna's plan involved around 2,600 jobs shed in Germany, with a further 8,500 elsewhere in Europe.
BAIC's preliminary offer is valued at 660 million euros and it has asked for 2.64 billion euros in German government guarantees.
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