More starters move to the grid on Opel bidding
Car parts producer Magna has cancelled a board meeting scheduled for Tuesday, postponing its decision on buying Opel. With the main bid now uncertain, other players have renewed their offers.
With the deadline to buy Opel drawing closer, the leading bidders, Magna and Russia’s Sberbank, along with automaker Gaz, may be losing their grip on the German car manufacturer.
Berlin is providing over $2 billion in bridge financing to help Opel survive. But two rival bidders are back in the running. Belgian holding company RHJ international says it is in advanced talks to buy the European unit of General Motors, and China's Beijing Automotive Industry Holding Co (BAIC) submitted a detailed bid for Opel earlier this month. Sevastian Kozitsin, analyst at Broker Credit Service, says access to the Chinese market may prove attractive.
“China with it's population of more than a billion and just 40 cars per 1000 people is a very attractive market. Russia with around 200 cars per 1000 people is still more advanced in the engineering field.”
Belgian holding company RHJ international will accept less government money, at the same time China can offer similar conditions to Russia – including production lines and a massive sales market.
The sticky issue with Magna is intellectual property rights. GM is looking for royalties from Opel, but VTB Capital Analyst, Elena Sakhnova, says this is throwing the reasoning behind the Magna, Sberbank, Gaz bid into doubt.
“Russian companies were bidding because they wanted to get technology and now, when they see that there would be problems in this field, it's not clear why we should spend that much money if we don’t get it. So, it’s a really huge problem, it's not typical, and it needs to be solved before we move forward.”
With GM and the German government now playing bidders against each other – the deal is expected to be sealed before the new year.