7.23Beijing Auto not favorite bidder for GM Opel

Beijing Auto not favorite bidder for GM Opel

 

http://autonews.gasgoo.com/auto-news/1011429/Beijing-Auto-not-favorite-bidde
r-for-GM-Opel.html

 

Shanghai, July 23 (Gasgoo.com) General Motors and the German government
yesterday failed to choose a buyer for GM's German unit Opel, as Germany
preferred Canadian auto-parts supplier Magna while GM was in favor of
Belgian investor RHJ, not taking the third bidder, China's Beijing Auto,
into serious consideration, media reported.

 

At Wednesday's meeting, German officials "made clear that we have a
preference for Magna," Germany's Deputy Economics Minister Jochen Homann
told reporters afterward. He added that the government's endorsement is
conditional on further concessions, in particular an increased capital
commitment by Magna and its Russian partners.

 

Magna and the Russians have offered to invest €500 million ($711 million) of
their own money in Opel, with €100 million to be paid by the signing of the
deal and €400 million in loans, which would gradually be transformed into
equity. The consortium is seeking a 55% stake in Opel.

 

RHJ International has offered to invest €275 million for a 50.1% stake in
Opel, requesting €3.8 billion in government funding. GM is understood to
favor RHJ's bid for Opel. 

 

Beijing Auto's preliminary offer was valued at €660 million for a 51% stake
in Opel and it asked for €2.64 billion in German government guarantees. But
Homann said that the bid by Beijing Auto was losing ground in the running
compared with the bids from Magna and RHJ.

 

Industry analysts said the German government has limited confidence in the
international management capability of Beijing Auto while GM is not willing
to sell its Opel brand to a Chinese carmaker to rival its profitable
ventures with China's auto giant SAIC. 

 

A recommendation on a partner is expected by the end of the month. GM aims
to finalize a deal by the end of the third quarter after being forced to
seek partners for the unit to access state aid to keep the business running.

 

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