General Motors has just 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.
The other finalist in the bidding, Belgian-based private equity firm RHJ International, was not favored by the German government since it thinks massive job losses will result.
In a statement the GM says, “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.”
After months of negotiations with numerous special interest groups, labor unions and European governments, GM is now saying, “definitive agreements should be ready to sign within a few weeks, with closing to follow within the next few months.”
Under the tentative deal, Magna/Sberbank will purchase 55% of the New Opel. GM will hold a 35% stake, and employees will be getting a 10% share.
Several contentious issues were not covered in the statement, including the role of Chevrolet in Russia and expanding Asian markets, as well as the intellectual property rights for the small car engineering that Opel currently provides for GM.