GM to sign deal to sell Opel early this week, report says

ERJ staff report (AN)

Munich, Germany -- General Motors Co. will sign a deal to sell a majority stake in Opel next Tuesday or Wednesday, Die Welt German newspaper reported, citing sources close to the negotiations.

GM is selling 55 percent of Opel to Canadian supplier Magna International Inc. and its Russian partner Sberbank.

The deal was due to be signed Thursday but was delayed because Germany and the European Commission are still working out an accord over a government aid package to restructure Opel and its British sister brand Vauxhall.

State aid

Germany pledged 4.5 billion euros ($6.71 billion) aid for Opel if GM agreed to Magna's bid over an offer from Belgian investor RHJ International.

Reports have said that European Competition Commissioner Neelie Kroes opposes the deal because she believes it breaks EU competition rules. On Thursday, a spokesman for Kroes dismissed speculation that Kroes was not prepared to endorse the deal or had demanded a new tender for Opel.

Sources in Germany close to the transaction played down concerns about the signing, adding the formal sale document was set to be inked by early next week.

Some reports said the deal could still be signed Friday.

Details to be resolved

The signing of the deal would cap weeks of negotiations by the companies and Opel labor leaders, but crucial details on financing, including state aid being sought from states with Opel plants, must be resolved before it can close.

Opel's 50,000 employees are supposed to get a 10 percent stake in the new company in return for cost concessions, while GM will keep a 35 percent stake.

Countries with Opel plants have fought to save jobs and avoid plant closures amid promises of billions in state aid.

Magna and Sberbank have vowed to inject 500 million euros into Opel, aiming to use it to make a push into the Russian market.

The European Commission is keeping a close eye on the deal to ensure state aid is not misused for political purposes.

Reuters contributed to this report

From Automotive News (A Crain publication)