General Motors Co. said Thursday that a consortium of Canada's Magna International Inc. and Russian lender Sberbank would acquire a majority stake in its European subsidiary Opel.
The deal was cheered by German Chancellor Angela Merkel, who saw it as a jobs saver ahead of Sept. 27 national elections.
The Opel Trust has given its approval for the sale. Fred Irwin, who chairs the government-backed trust set up to oversee Opel before GM's bankruptcy, had final say on the deal because it holds 65 percent the company whose brands include Britain's Vauxhall; GM held the other 35 percent.
GM said key issues — including support from labor unions and a financing package from the German government — would have to be finalized, but it expected the deal to close in the "next few months."
Magna and Sberbank will purchase a 55-percent stake in Adam Opel Gmbh and GM will hold 35 percent. The remaining 10 percent will go to workers.
"This is what the government wished," Merkel said. "Opel still has a difficult way ahead of it, but I trust the workers will take on the task."
Merkel said talks would be held with other countries where Opel has locations would be held in the coming weeks to ensure the burdens of restructuring could be share fairly. Germany's lead role in pushing the Magna deal led to fears it would seek to protect its workers first.
"It's possible now that GM and Opel will find a new way in Europe," she said. "We've taken a big step on the way ahead. We can have a new beginning."
Merkel's government favored the Canadian-Russian consortium's bid and offered $2.2 billion in bridge financing in May to keep Opel afloat. Magna has promised to keep all of Opel's German plants open.
GM has been trying to unload Ruesselsheim, Germany-based Opel since it ran into severe financial trouble earlier this year. Industry analysts say the unit has too many employees and too much factory capacity for its sales level and its costs are too high.
But Opel and its engineers are also highly integrated into GM's global product development system, designing the underpinnings for its next generation of small and midsize cars.
The announcement came after months of wrangling over who was best suited to take on Adam Opel GmbH, a Germany-based automaker with factories in Poland, Spain, Belgium, Portugal and Britain, where it makes the Vauxhall brand.
"The hard work over the past two weeks to clarify open issues and resolve details in the German financial package brought GM and its board of directors to recommend Magna and Sberbank," said Fritz Henderson, GM's chief executive said.
"We thank all parties involved in the intensive process of the last few months — especially the German government — for their continued support that enables this new venture."
Henderson said GM will continue to work with Opel and Vauxhall to develop and produce cars, keeping Opel and Vauxhall as a part of GM's product development organization, "allowing all parties to benefit from the exchange of technology and engineering resources.
"The current portfolio of Opel and Vauxhall cars and the models in the pipeline are a strong basis for future success."
"Participating in GM's global technology development and purchasing organizations secures important economies of scale for Opel and Vauxhall and other GM brands," the statement said.
(From Associated Press)
