The sale of GM’s European Opel division to Russian-backed Canadian autoparts maker Magna has been put on hold. The on-again, off-again saga is off-again as GM board is set to meet on November 3rd to review changes to the agreement.
The changes, include a request by the German Economy Minister to GM, asking the company to clarify that the decision to choose Magna over rival Belgian bidder RHJ International was due to business and not political reasons. That may be difficult for GM to do as the German government had promised a significant loan to Opel if Magna was chosen, with the understanding that Magna’s proposal would keep more jobs in Germany.
Recently the European Commission put pressure on the German government to clarify that the proposed aid was available to any bidder and not just to Magna – which it seems was not the case. If the German government changes its tune, that may cause GM to favor Magna’s Belgian competitor and put the entire deal in jeopardy.
[Source: Automotive News]