UPDATE: German State Secretary Doesn't Expect Opel Deal Next Week
08 Juli 2009 - 5:42PM
Dow Jones News
German State Secretary Jochen Homann said Wednesday that he
doesn't expect Magna International Inc. (MGA) to clinch a deal next
week to take over General Motors Corp.'s (GMGMQ) German unit Adam
Opel GmbH.
"An agreement between Magna and GM on a business plan" might be
reached next week at most, Homann told Dow Jones Newswires in an
interview, adding that this wouldn't mean that the deal is
finalized.
He said some open questions will persist, such as details on
financing and further examinations through the U.S. and European
governments.
In May, GM signed a memorandum of understanding to sell a
majority stake in Opel and its U.K. sister brand Vauxhall to Magna,
whose bid is backed by Russia's Sberbank Rossia (SBER.RS) and
automaker OAO GAZ Group.
The tentative agreement with Magna is backed by EUR1.5 billion
in bridge financing provided by the German government to keep Opel
afloat as parent GM filed for bankruptcy protection in the U.S.
Homann confirmed that Magna is the frontrunner in the race for
Opel, but he reiterated that GM has to make the final decision
about a sale.
It can't be ruled out that GM signs tentative agreements with
other bidders than Magna, he said. These agreements would have to
be presented to GM's board of directors.
The German government would also examine the viability of any
new offer due to the required financial guarantees from the state,
Homann said.
Beijing Automotive Industry Holding Co. Ltd., Fiat SpA (F.MI)
and Belgium-based private equity firm RHJ International SA
(RHJI.BT) have also launched bids for Opel.
Company Web site: www.opel.de
-By Beate Preuschoff, Dow Jones Newswires; +49 (0)30 - 2888
4122, beate.preuschoff@dowjones.com (Christoph Rauwald contributed
to this story).