Beijing Automotive bids for Opel; Magna still expected to close deal
Even though Beijing Automotive (BAIC) tendered a non-binding offer for Opel, the company is said to have no chance of actually acquiring the brand. General Motors is still in talks with Magna and its partners, GAZ and Sberbank, and according to Sberbank CEO German Graf, "The choice has been made and the question now is of how to structure the deal."
Observers also feel that the GM-Magna agreement is merely waiting on some dotted I's, crossed T's and that the deal won't fall apart unless Magna blows it up or walks away. That hasn't stopped GM and the German government from creating the appearance of courting other bidders for Opel and Vauxhall, including BAIC and Belgium's RHJ.
BAIC appears to be serious, even if everyone assumes that GM's just using it as a decoy. Magna wants to get the paperwork inked by July 15, and that's around the same time that BAIC wants to make a binding offer for Opel's purchase. It's working with Deutsche Bank and PriceWaterhouse Coopers on its proposal, and we can only assume BAIC will be ready with a bag full of cash in the unlikely event Magna exits stage left.
[Source: Auto News, sub req'd]
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Reader Comments (Page 1 of 1)
PiCASSO 11:23AM (7/05/2009)
I'm sorry, with all due respect, I really don't want a Chinese company taking ownership of Opel. It's not right.
As the Chinese market booms, I don't think it's fair for them to be purchasing out established companies that are struggling. If the Chinese market doesn't allow outside ownership to be greater than 49%, the same should apply for any Chinese company attempting to get controlling interest in an outside company.
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compy386 12:03PM (7/05/2009)
I agree. China needs to be more free on ownership criteria of Chinese domestic brands. However, by not allowing the Chinese to bid on auto companies it's ultimately the companies themselves that are hurt by it. If GM can get an extra 100M who cares if it comes from BAIC.
Andrew 2:47PM (7/05/2009)
@compy386
I think we *should* care who buys Opel, because GM will still own parts and continue to work with Opel.
If the Chinese use it to steal technology GM might find themselves competing with their own products. What good will an extra 100M do for GM then?
AUTOMANIAC 4:00PM (7/05/2009)
Don't worry chinese aren't going to steal anything because russians will steal it, since opel will be sold to magna.But who cares? the important thing is not to sell to fiat or it will become too competitive right? who cares if we give away all that technology, the only thing that could save us from cheap labor-cost countries.
the4thheat 1:43PM (7/06/2009)
Well I do think the Chinese should start loosening up the 50% rule on ownership. They actually have loosened some of the rules but so far it's only for smaller businesses. So you can open a hair salon in China even if you're a foreigner, and don't need a local partner. But for larger businesses the rules are still in place.
The rules were basically to prevent a repeat of early 20th century exploitation of China by foreign powers though, where China didn't get to keep any of the wealth that foreign companies got in China. Just to make sure that foreign companies don't just only use the Chinese as cheap labor.
Still I think if it's come to the time that their companies are acquiring foreign companies they should start allowing larger stakes at home.
But anyways if you're going to whine about China it's not like Russia is super welcoming lol.
Nick 4:08PM (7/05/2009)
Why do competitors try to buy Opel?
Wouldn't letting it disappear alleviate the markets (huge over-production of cars already)??
There's too many car makers already!
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Andrew 5:52PM (7/05/2009)
Nick, yes, there are a lot of car companies out there. However Opel is a profitable company that produces for the European market, it is worth a lot of money in the right hands.
GM can't afford to keep all of it, but they would like to if they could. There's no point in closing it down to aid your competitors when you can have that market share yourself.
P.S. You obviously don't know the European car market(s) where Opel is a real brand and the other GM brands count for little.
Rupert 8:51AM (7/06/2009)
"However Opel is a profitable company..."
Opel are losing 6million euros per day. It doesn't matter if you read up on this story in English, French or Spanish, all the info is the same, and the 1.5billion (still to be ratified by the EU as it clearly distorts EU competition) will have all been used up by September, no matter which news source you choose. In other words even the silly objective of delaying the whole matter until after the German elections will have been missed.
AMcA 5:11PM (7/05/2009)
Seems to me that it's exceedingly dangerous for GM to hand its designs over to a new competing entity.
What, I wonder are the terms of further use of the Epsilon and Delta platforms post-sale? Are they time-limited? Does the new company get to engineer its own derivatives of them?
Inquiring minds gotta know.
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Tony 5:16PM (7/05/2009)
Haven't these stupid people learnt yet? Trying to take over the world in what ever sector of manufacturing you pick is what got us into this mess in the first place. Too big to fail, equals too big to manage, period. Let the peoples of this earth have their own autonomous companies, this way we all benefit from their strengths and learn from their weaknesses. It is what the Japanese do best. You don't see Toyota or Honda trying to buy up every company around even if they do have the cash to buy up the "Detroit three" lock, stock and barrel. Magna is Canadian but the CEO is Austrian and has done business building Mercedes G-wagons and all sorts of cars for other companies for years in Germany, Spain and Austria. Magna enough to succeed but not too big to fail and they know that.
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Andrew 5:54PM (7/05/2009)
Magna is not just led by an Austrian, he built the company from scratch.
And the company that actually makes cars for the German brands is Magna-Steyr, a company they bought from Steyr-Daimler-Puch. Don't call it Magna, it's a whole different company.
japov 7:43AM (7/10/2009)
In the end, it's such a pity that a company like Opel reached the point of being sold like only because GM is not competitive enough on the market. If GM would have given the deserved attention to Opel, it could have gained more from keeping it.
In my opinion it all started with the dezastrous Opel vectra which was a big failure for the Opel brand despite some sales
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