Magna Puts Opel Plan on Halt

Bertel Schmitt
by Bertel Schmitt

For July 7, Magna had called a board meeting to rubber stamp the takeover plan of Opel. Now, Reuters says the board meeting has been delayed to July 14. Why, is anybody’s guess.

What is for sure is that the delay gives rival bidder Beijing Automotive (BAIC) more time to convince GM and especially the German government that their offer is better than Magna’s.

Reuters says BAIC offers €660 million ($923 millionn) in equity for a 51 percent stake in Opel. GM would hold the remaining 49 percent stake. That’s a more conservative approach than the Magna patchwork.

The Magna/Sberbank offer was next to no equity for a 55 percent deal, 20 percent for Magna, 35 percent for Sperbank, 10 percent for the workers. 35 percent left for GM.

BAIC asks for only €2.64 billion in loan guarantees. Magna wanted €3 billion. After checking the books in Rüsselsheim, BAIC backed away from its original offer not to cut any German jobs for the first two years.

The Magna plan had come under increased criticism from the German government. Heinrich Weiss, President of the German-Russian Chamber of Commerce called the plan “ amateurish and irresponsible.” The plan may also attract EU scrutiny.

More and more voices in Europe call for a cull of Opel, to reduce overcapacity and to give other European manufacturers more breathing space.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Rastus Rastus on Jul 06, 2009

    If I had any input, I'd offer to sell the company to Al Gore. I propose letting AG stand up, take control, put his money where his green mouth is, and let him do what any true leader does: Lead. AG, this is your invitation to show us not only what you talk so blithely about...but now you have an actual chance to DO something. Please...I'd love to see an Opel made of recycled soy protein and which gets 2000 miles per 30-minute solar recharge. which bends the laws of physics to suit your global agenda.

  • Twoliter Twoliter on Jul 06, 2009

    According to the July 4th Globe and Mail [Toronto], GM wants a clause "allowing GM to buy back it's stake" after the restructuring. That seems to be some "very fine print" and would be a deal-killer for the russkies.

  • Bertel Schmitt Bertel Schmitt on Jul 06, 2009

    twoliter: The buyback clause is supposedly off the table.

  • Akear Akear on Jul 07, 2009

    Well, it looks like Opel is headed back to GM's womb.