--
 
Top new models for SA

From Renault's new Alaskan bakkie to the latest models at the Frankfurt motor show bound for SA.

Electric cars in SA

The debate on whether or not Electric Vehicles (EV) are viable in South Africa rages on.

China moves on Opel bid

2009-07-06 11:44

Frankfurt/Munich - A Chinese carmaker has offered to buy a stake in General Motors unit Opel, challenging a deal from Canadian auto parts supplier Magna, sources said on Friday.

State-owned Beijing Automotive (BAIC) has submitted an indicative, non-binding offer for Germany's Opel, sources familiar with the situation told Reuters, and would make a binding offer by mid-July.

Magna, backed by Russian partners, is the frontrunner to buy Opel. Sources told Reuters on Thursday that Magna's board of directors wants to approve a business plan for Opel on July 7.

Belgian holding company RHJ International is the third bidder, although it posted a sharply wider full-year loss on Wednesday and analysts are doubtful it has the cash to compete with its rival suitors.

Whoever wins the race for Opel faces a tough antitrust probe, a German government minister said on Friday.

When asked whether he counted on Brussels examining any deal for Opel under a lengthier, so-called 'phase II' investigation, German deputy economics minister Jochen Homann told reporters: "Yes, clearly."

Competition authorities

He declined to specify what issues might concern EU competition authorities since the German government is still awaiting a business plan for the takeover, which he hoped to get by the end of July.

Any business plans submitted will be evaluated by PriceWaterhouse Coopers on behalf of Berlin, since the government will have to offer more state aid after already extending Opel a six-month 1.5 billion euro ($2.1 billion) bridge loan that matures on November 30.

"Every day that there is no restructuring costs money, every month that goes by is a lost month," said Homann, the head of the government's Opel task force.

Some support may come from Britain, where GM produces and markets Opel cars under the Vauxhall brand.

The British government said on Friday it was prepared to support any deal, possibly in the form of loans, if the terms were right.

"I'm not going to discuss the detail of any financial underwriting, but it may involve loans or loan guarantees," Business Secretary Peter Mandelson said. "We would obviously have to have interest paid and some security (for the loans)."

Magna doubts

Speaking at a Handelsblatt auto industry conference, Homann expressed scepticism over Magna's concept for Opel and said that vested interests praising the auto parts supplier's offer as the best left the German government open to "extortion".

"We will see whether Magna's concept is successful. It is based on theories over which one can heartily discuss... There are justifiable question marks," he explained.

He expressed doubts as to the wisdom of basing a business plan on the boom-and-bust Russian car market and questioned whether Magna could lure other carmakers to utilise Opel's unused production capacity.

Homann, who reports to Minister Karl-Theodor zu Guttenberg, stated no preference for any of the three current bidders.

Homann warned that whoever wants to acquire Opel would have to prepare for a tough EU cartel probe.

"The negotiating parties would be well advised to develop a concept that is economically sustainable, fulfils our laws governing loan guarantees and is compliant with EU subsidy rules," he told the conference.

Homann pointed to the chronic structural overcapacities that the EU is concerned about and cautioned that the European Commission has stated a bailout could not distort competition.

Sources familiar with the Opel negotiations have voiced anxiety that Paris might try to install French Economy Minister Christine Lagarde as the next EU Competition Commissioner under a likely second term for President Jose Manuel Barroso.

They fear she might be more critical in part since Opel does not have any major manufacturing operations in France, home to key competitors PSA Peugeot Citroen and Renault, which counts the French state as a large shareholder.


NEXT ON WHEELS24X

Inside Wheels24

There are new stories on the homepage. Click here to see them.