Magna International Inc. (MGA) said Monday while it has reached
a plan to have General Motors Corp.'s (GM) Adam Opel unit avoid an
insolvency filing for the Europe-based auto maker, there's no
certainty a deal will be concluded.
The Canadian auto-parts supplier was selected by the German
government early Saturday as a partner for Opel, which has been in
need of its own cash infusion.
Magna said Monday that after "extensive negotiations over the
past several days" with various shareholders, including the German
federal and state governments, GM and the US Treasury, Magna
reached a "conceptual framework" to "pursue the restructuring
required for its immediate and long-term viability."
Magna Chairman and founder Frank Stronach said despite intense,
marathon talks, "we have achieved a constructive solution that
represents a "win-win" for all stakeholders and will position Opel
to compete and succeed."
The prospective deal for GM's European operations marks a major
breakthrough for Magna and Stronach. His goal is to turn Magna into
an auto maker in its own right and not just a producer of parts and
an assembler of vehicles for other companies. Two years ago, he
tried to acquire Chrysler LLC from Daimler AG (DAI) but was bested
by private-equity firm Cerberus Capital Management LP. Stronach
said Magna has about 74,000 employees in 240 manufacturing
operations.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com