Magna hammers out framework for Opel takeover with General Motors

DDP/The Local
DDP/The Local - [email protected] • 13 Aug, 2009 Updated Thu 13 Aug 2009 16:39 CEST
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The Austrian-Canadian auto parts company Magna has reportedly worked out an agreement with US carmaker General Motors regarding the takeover of its German unit Opel. But the deal has yet to be inked.

Opel workers council chairman Klaus Franz told news wire DDP both sides had ironed out the remaining obstacles to the deal, but it had yet to be made official. Sources at Magna also confirmed the agreement, however, said they were waiting for the approval of GM’s supervisory board.

In recent days, GM has seemed to be favouring financial investor RHJ International’s bid for Opel. And GM negotiator John Smith had said earlier this week there were still several questions surrounding Magna’s proposal.

But the German government has repeatedly said it prefers Magna, making the latest agreement with GM critical to the auto parts firm’s hopes of taking the wheel at Opel.

Magna wants to buy Opel with the help of Russian state-owned Sberbank. It has said it would need €4.5 billion in state aid for the takeover, whereas RHJ is asking for less than €3 billion in state guarantees.

However, the German government fears RHJ could end up eliminating more jobs at the carmaker and a spokesman in Berlin said on Wednesday that even Chancellor Angela Merkel was prepared to take part in negotiations if necessary.

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