Magna Close to Deal for GM's Opel
Friday, May 29, 2009; 12:59 PM
A source close to Magna said the German government is on the verge of completing an agreement that would give control of Opel to Magna in cooperation with Russian state bank Sberbank Rossii and Russian automaker GAZ.
Earlier today German television channel N24 reported that GM has agreed to sell Opel to Magna.
The German government is now holding a meeting in Berlin about the fate of Opel. While GM races to meet a U.S. government-imposed deadline of June 1 to restructure, the German government has led the search for a buyer of GM's Opel unit, which serves as the centerpiece of GM's European operation. GM is also looking to sell Saab in Sweden and Vauxhall in Britain, as well as several other brands in the United States, including Saturn and Hummer.
Fiat chief executive Sergio Marchionne refused to participate in the Berlin talks. Today, Fiat reiterated its intent to purchase Opel, which would grow Fiat to the second largest carmaker in Europe.
Yet, Fiat balked at a recent request by the German government to fund Opel on an emergency basis while the government determines the timing and conditions of financing. Fiat said it would incur "unnecessary and unwarranted risks."
"The issues that emerged from the last round of negotiations on Tuesday and Wednesday have left us perplexed, since we had not been advised until then of certain key financial factors and data which we consider to be essential to the formulation of a proper merger offer," Marchionne said in a statement.
"Given the nature of the process itself and its short duration, Fiat has been unable to have full access to the financial records of Opel to determine its precise financial condition and thus properly frame a merger proposal that would be fair to General Motors as the seller and to Fiat S.p.A."