General Motors Co. pushes back the signing of an agreement giving Canadian parts maker Magna International Inc. control of German auto maker Adam Opel GmbH, saying its board will review the sale agreement next month.
GM President and CEO Fritz Henderson intimated earlier this week a signing could occur within days.
But the European Union, which must also sign off on the Opel sale, is concerned the financial backing Opel’s native Germany offered to Magna and Russian investment partner OAO Sberbank was not extended to other bidders.
The EU fears Germany’s contribution to the deal may have affected selection of the winning bid. The industrial holding company RHJ International Inc. was among the final two bidders for Opel, which GM is selling as it pares down its business after exiting bankruptcy.
John Smith, group vice president-corporate planning and alliances at GM and the auto maker’s lead negotiator on the deal, says GM’s board of directors will review a letter from the EU detailing its concerns during its next regular monthly meeting on Nov. 3.
“In the meantime, work will continue to resolve remaining open points with the Magna/Sberbank proposal – for example, related to labor-cost reductions and the government-backed financing package – to document the related understandings, and complete all preparations for the signing of binding agreements should that be authorized by GM’s Board at the Nov. 3 meeting,” Smith says in post to a GM blog earlier today.
The deal with Magna would see the supplier and Sberbank split a 55% share of Opel, while GM would retain 35% and a 10% share would go to Opel employees. The German government, hoping to save some 25,000 Opel jobs at sites in the country, has thrown €4.5 billion ($6.8 billion) behind the deal.
