GM delays Opel sale to Magna till 3 November
24 October 2009
The ongoing saga of General Motors Co's (GM) sale of its European unit Adam Opel GmbH to Canadian auto-parts maker Magna International Inc (Magna) is delayed at least up to the company's next board meeting scheduled on 3 November, according to a blog written yesterday by Johan Smith, GM's vice president and chief negotiator.
The US auto giant, which emerged from bankruptcy in July, had finally zeroed-in Magna last month as the potential buyer for its European jewel Opel including the Vauxhall brand in UK. Magna, along with its Russian partner Sberbank agreed to invest €500 million in Opel in return for a 55-per cent stake in the company. GM would retain a 35-per cent hold, while the Opel workers would have the remaining 10 per cent.
GM has not provided details on the progress of the transaction, although the company's chief executive officer Fritz Henderson earlier indicated that a final agreement on the sale could be reached as early as this week.
"Given the significance of the Opel transaction, GM's board will soon meet in its regular monthly meeting to consider minister zu Guttenberg's letter and changes to the Magna / Sberbank proposal that have occurred since its last review on 9 September," Smith said.
Smith further stated that work would continue to complete all preparations for the signing of binding agreements should that be authorised by the board meeting on 3 November.
European Union's (EU) competition commissioner Neelie Kroes raised concern about significant indications on Germany's favouritism towards Magna, based on the commission's enquiry. The German government promised to provide a €4.5 billion ($6.8 billion) aid to the ailing auto unit.