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German Chancellor Angela Merkel once again threw her support behind Magna International’s bid to acquire Opel from General Motors, even as rival bidder RHJ improves its bid by requiring less state funding.
Merkel said Tuesday that she was ready to intervene personally to support Magna’s bid, which involves aggressively expanding Opel in the Russian auto market. The Canadian supplier has offered to inject 500 million euros ($714 million) of equity into Opel and is requesting 4.5 billion euros ($6.4 billion) from the German government.
“I have a clear preference for Magna and want to make that clear again,” Merkel told German television network RTL in an interview. “We are in constant talks.I am always informed. If it is necessary, I will join in, of course.”
Merkel will travel to Russia on Friday to meet with Russian President Dmitry Medvedev, and Opel is expected to be discussed. Medvedev indicated during a trip to Germany last month that he hoped a deal could be struck between GM and Magna.
Seeking to get more political support in Germany, Belgian investment company RHJ International will ask the German government for less than 3 billion euros ($4.26 billion) in its bid for Opel, German business daily Handelsblatt reported this week. It was unclear if RHJ would also increase its equity bid of 275 million euros ($392 million) as well.
GM prefers RHJ’s bid over Magna’s, as it sees RHJ’s plan to restructure Opel and downsize the company as more feasible than Magna’s plan to expand. RHJ has also expressed that it would possibly sell Opel back to GM in the future, while GM and Magna have unresolved issues over intellectual property rights.
GM’s chief negotiator for the Opel deal, Group Vice President John Smith, said RHJ’s offer was strategically equal to Magna’s while being considerably easier to implement and a financially better deal for German taxpayers.
Source: Automotive News
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