The preliminary deal struck between the Canadian-Austrian autoparts group Magna International Inc. and GM's European jewel Adam Opel GmbH has sailed into troubled waters as Magna desires access to GM's global technology for its Russian partners on the deal.
After a series of hectic negotiations, Magna was selected by GM as the preferred bidder for divesting a stake in Opel and a memorandum of understanding (MOU) to this effect was signed by the two sides a month ago.
Under the terms of the deal, Magna along with its Russian ally Sberbank would acquire a 55-per cent stake in the new company with the GM stake reduced to 35 per cent and the remaining 10 per cent controlled by Opel's employees. The state-controlled Sberbank's share has been agreed to be 35 per cent. (See: Opel picks Magna; job cuts loom over European plants)
The negotiations between Magna and GM entered trouble waters as Magna wishes to manufacture Opel-based automobiles in collaboration with Russia's Gorky Automobile Plant (GAZ), using GM's global technology.
GAZ, Russia's second largest automaker located near Nizhny Novgorod, 400km east of Moscow is plagued by lay-offs, production problems and over $1.4 billion debt. The company publicised itself as the ''industrial partner'' of Sberbank and Magna, is looking forward to become a world-class automobile company and increase Opel's market share in the country from 3 per cent to an ambitious 20 per cent.
Magna's chief executive Siegfried Wolf said he is confident to strike a deal to take over Opel by July 15.