GM to sell Opel to Magna

The Opel Trust approved the sale of a 55% stake in General Motors Co.'s (GM) units Adam Opel Gmbh and Vauxhall to Canadian car parts maker Magna International Inc. and Russian bank OAO Sberbank in a split decision. The trust - set up by the German government in May to hold a 65% stake in Opel/Vauxhall and oversee the investor search - did not reach a unanimous decision, said chairman Fred Irwin. Dirk Pfeil, who represented the German states with Opel plants on the board, said that he abstained in the vote. The two representatives of GM approved the deal. Chairman Irwin had no voting rights. "This doesn't mean that Adam Opel is saved," Irwin said at a press conference in Berlin. The deal ended months of uncertainty over the fate of GM's struggling European operations.
The German government backed the Magna-led bid for a majority stake in Opel and said that it would provide 4.5bn euros (US$6.5bn) in state-backed guarantees to help Magna restructure GM's European subsidiary. Angela Merkel, Germany's chancellor, whose government threw its weight behind Magna's bid, welcomed GM's decision, saying that the result showed that the government's patience, clarity and decisiveness had paid off. However, Merkel conceded that it would not be an easy way forward for Opel. Negotiations over the Opel sale are expected to continue. The deal still needs European Union approval.
GM will keep 35% of Opel, with employees taking a further 10%. In a crucial move for Detroit, GM and Opel will continue to develop cars and engines together, giving the US auto major continued access to Opel's small and medium-sized platforms needed to compete with the likes of Volkswagen and Toyota. Rival bidder RHJ failed to secure loan guarantees from a German government skeptical of the private equity group's capacity to finance and manage Opel. Magna promises to close no factories in Germany and keep the two Vauxhall plants in the UK going at least until 2013.