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| GM should reconsider earlier bids for Opel: EU |
| Bloomberg / Berlin Oct 19, 2009, 00:34 IST |
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General Motors Co should be allowed to reconsider all bids for its Adam Opel GmbH unit after German aid policies pushed the US carmaker to choose Magna International Inc as the buyer, the European Union said.
Germany’s offer of 4.5 billion euros ($6.9 billion) in state loans and guarantees for Opel’s sale must be available to all suitors to meet antitrust rules, the EU said on Friday in a statement outlining a letter that European Competition Commissioner Neelie Kroes sent to Economy Minister Karl Theodor zu Guttenberg. Authorities should inform GM and the trust that owns Opel that the aid is available to any buyer, the EU said.
Guttenberg said on Saturday that Germany will work to assuage EU concerns and that the sale is likely to proceed. Chancellor Angela Merkel’s government chose Magna, Canada’s biggest auto-parts maker, and Russian partner OAO Sberbank as Opel’s preferred bidder in May, saying they wanted to preserve jobs. GM agreed in September to sell the unit to Magna, turning down a bid from Brussels-based investment company RHJ International SA.
“If there are misunderstandings that need to be cleared up, we will do that,” Guttenberg told reporters in Berlin. “I’m confident this will happen in the coming days. Answers will be given, and they’ll be the right answers.”
A preliminary EU inquiry showed “significant indications” that Germany improperly favored Aurora, Ontario-based Magna over other suitors for Opel, Kroes said in her letter. “A precondition for the aid would be incompatible” with EU rules that seek to limit state involvement in industries, she said.
Karin Kirchner, a spokeswoman in Zurich for GM’s European operations, declined to comment on Saturday.
Opel, which has its headquarters in the Frankfurt suburb of Ruesselsheim, received an initial 1.5 billion euros in emergency loans from Germany as Detroit-based GM sought Chapter 11 bankruptcy protection in the US in early June. A number of German politicians, including Roland Koch, prime minister of Opel’s home state of Hesse and a member of Merkel’s Christian Democratic Union party, said in May that they favoured Magna.
A trust of executives and politicians from Germany and the US now controls a 65 per cent stake in Opel, with GM owning the other 35 per cent. The trust chose Magna in September on GM’s recommendation. RHJ had been the only other contender after GM negotiators and government aides agreed in July to stop looking at a bid from Beijing Automotive Industry Holding Co.
“GM and the Opel trust should be given the opportunity to reconsider the outcome of the bidding process on the basis of firm written assurances by the German authorities that the aid would be available, irrespective of the choice of investor or plan,” Kroes said.
RHJ, which agreed on October 15 to buy Commerzbank AG’s Kleinwort Benson private-bank unit in the UK, isn’t interested in reviving a bid for Opel, said Arnaud Denis, a spokesman. “We are not considering it,” Denis said. “This isn’t in the cards.”
Edda Graf, a spokeswoman based at Magna’s European headquarters in Oberwaltersdorf, Austria, declined to comment.
Other contenders for the Opel stake have found alternative automotive investments. Fiat SpA, Italy’s biggest manufacturer, was already buying a stake in Auburn Hills, Michigan-based Chrysler LLC when it submitted a non-cash offer for Opel that included factories and other assets from its own car operations.
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