Breaking: GM Agrees On Opel Sale to Magna

Breaking: GM Agrees On Opel Sale to Magna

General Motors has just announced a deal that will see it’s European Opel brand sold off to Canadian autoparts supplier Magna International. The deal has yet to be finalized, but this morning GM announced Magna was the preferred bidder.

The sale will see Magna and Russian backer Sberbank take a 55 percent stake in both Opel and Vauxhall. Opel employees will get a 10 percent stake in the new company. GM will continue to hold on to a 35 percent stake in Opel.

“The hard work over the past two weeks to clarify open issues and resolve details in the German financial package brought GM and its Board of Directors to recommend Magna/Sberbank,” said Fritz Henderson, GM President and CEO. “We thank all parties involved in the intensive process of the last few months — especially the German government — for their continued support that enables this new venture. I’d also like to thank the Opel and Vauxhall customers for their continued loyalty. GM will continue to closely collaborate with Opel and Vauxhall to develop and produce more great cars, such as the new Insignia and the new Astra,” Henderson added.

The deal will see continued cooperation by GM and Opel, allowing the two automakers to take advantage of economies of scale. The cooperation will also extend to projects like the Ampera (pictured above), a European version of the Chevy Volt.

Official release after the jump:

GM Board Recommendation to Sell Majority Stake in Opel/Vauxhall to Magna International/Sberbank

  • GM to sell 55% stake in New Opel to Magna/Sberbank
  • Agreement on new ownership structure signals fresh start for New Opel
  • Employees to hold 10% stake in New Opel
  • Government supports financing through additional state guarantees

Zurich. General Motors today announced that its Board of Directors supports a bid from the consortium of Magna International Inc. and Sberbank to buy a majority stake in its European Opel/Vauxhall operations.

Several key issues will be finalized over the next few weeks to secure the binding agreements, including the written support of the labor unions to support the deal with the necessary cost restructuring for viability and the finalization of a definitive financing package from the German government. The definitive agreements should be ready to sign within a few weeks, with closing to follow within the next few months. Under the deal, Magna/Sberbank will purchase a 55 percent stake in New Opel; GM will hold a 35 percent stake and employees will be provided a 10 percent stake.

“The hard work over the past two weeks to clarify open issues and resolve details in the German financial package brought GM and its Board of Directors to recommend Magna/Sberbank,” said Fritz Henderson, GM President and CEO. “We thank all parties involved in the intensive process of the last few months — especially the German government — for their continued support that enables this new venture. I’d also like to thank the Opel and Vauxhall customers for their continued loyalty. GM will continue to closely collaborate with Opel and Vauxhall to develop and produce more great cars, such as the new Insignia and the new Astra,” Henderson added.

The agreement will keep Opel/Vauxhall a fully integrated part of GM’s global product development organization, allowing all parties to benefit from the exchange of technology and engineering resources. The new ownership structure constitutes a new lean, efficient and independent organization for the Opel and Vauxhall brands. The current portfolio of Opel/Vauxhall cars and the models in the pipeline are a strong basis for future success.

Participating in GM’s global technology development and purchasing organizations secures important economies of scale for Opel/Vauxhall and other GM brands. For example, vehicles that represent new propulsion technologies, such as the Ampera extended-range electric vehicle, can only be brought to market in a joint effort.

“GM operates many joint ventures around the world and has proven in the past that this business model delivers the right balance of independence, innovation and synergies,” said John Smith, GM Group Vice President Business Development. “All parties will work hard to close the deal as soon as possible,” he added.

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