he European operations of General Motors (GM) are to be sold
following the carmaker’s bankruptcy in the US.
Canadian parts manufacturer Magna emerged as an
early favourite, and the company – which is acting in partnership
with Sberbank of Russia – signed a letter of intent with Opel.
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Magna is the frontrunner to buy 55 percent of Opel,
and the German government has agreed to provide a €1.5 billion
(£1.3 billion) bridging loan, on the understanding that Magna would
try to limit job losses in Opel’s German factories.
However, it has lately emerged that other bidders
may yet have a shot at winning the Opel prize, with China’s Beijing
Automotive Industry Holding Co (BAIC) and a consortium led by
investment fund Ripplewood two of the interested parties.
“We are in talks with several bidders. The outcome
remains open,” a GM spokesman told German business paper
Handelsblatt.
If Magna succeeds in its bid to acquire GM’s
European businesses, it could take ownership as early as September.
Currently, a large proportion of GM sales are funded via its former
finance captive GMAC, which has also had to accept backing from the
US government.
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By GlobalDataIt is questionable whether the US government will
allow GMAC to use American taxpayers’ money to fund car purchases
for consumers in Europe buying from a non US-owned company.
As such, it is not inconceivable a new arrangement
could be reached regarding consumer finance for customers of Opel
and Vauxhall.
Rupainka Rajan, equity research analyst at
Independent Research Private Ltd, said: “There could be an
opportunity for a new finance partner for GM Europe, but Magna does
not have the expertise needed to set up and run a consumer
financing business, and would find it difficult to provide
financing for its customers.
“However, it does have $1.7 billion [£1.04 billion]
in cash, so could provide funds for a captive finance operation –
perhaps in conjunction with a partner. A joint venture or a
strategic alliance could be a possibility.
“Also, Sberbank – Magna’s partner on the deal –
could perhaps help Magna to set up a financial services arm to
finance Opel and Vauxhall car sales at a later stage.”
GMAC’s UK subsidiary declined to comment on the
sale of GM Europe, with a spokesman saying it was too early to tell
what the consequences for the GM-GMAC relationship would be.
