Opel sale to Magna is down to "details", says GM Europe chief

Jul 4, 2009, 16:56 GMT

   Frankfurt - The sale of General Motors' (GM) European subsidiary Opel to Canadian car parts manufacturer Magna is on track for completion this month, the head of GM Europe said in a newspaper interview to be published Sunday.

   'It's only a matter of details now,' GM Europe's chief executive Carl-Peter Forster told German daily Frankfurter Allgemeine Zeitung (FAZ).

   Forster was confident there had been broad agreement at a top- level meeting between GM and Magna. He could not say when the contracts would be signed but said, 'It would be great if this would work by mid-July.'

   The GM executive said the head of Magna, Siegfried Wolf, had been applying pressure. 'That is a good thing,' Forster added.

   Dieter Althaus, the State Premier of Thuringia where Opel has a factory, reiterated that little stood in the way of the deal with Magna and its partners, Russian state-owned Sherbank and carmaker GAZ.

Magna planned to separate its car parts manufacturing business from Opel, German news magazine Focus reported. This was to benefit Opel competitors who bought car parts from the Canadian-Austrian manufacturer.

Forster told FAZ that other Opel bidders had not proceeded as far as Magna in their talks with GM, adding, 'Magna has a very clear lead.' The question of accessing Opel's patents was largely resolved.

One open issue was the future setup of the Russian business, Forster said. 'Who will be the local partner there? What will happen to the GM factories there, and to the other GM brands present in Russia?' the GM Europe chief asked.

Meanwhile, China's Beijing Automotive Industry Holding Company (BAIC) has reportedly sent letters to German government members, in a last-minute attempt to convince them of their Opel bid, according to FAZ.

The letter said BAIC would offer an 'excellent home' for Opel, arguing that their proposal would cost German tax payers less than Magna's offer.

BAIC's offer would come with a 660-million-euro (923-million- dollar) sweetener and would require just 2.64 billion euros in German state guarantees. Magna, on the other hand, has negotiated guarantees to the tune of 4.5 billion euros.