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30 May, 2009 12:28

Opel sold to Russia and Canada

Germany's Opel has been sold – with a joint-Russian-Canadian bid the winner in the race to buy one of Europe's oldest and most well-known carmakers.

Russia's biggest lender Sberbank and automotive giant GAZ – along with Canadian car parts firm Magna – have successfully bought Opel from US motor giant General Motors, which is filing for bankruptcy.

“It's good for Russia to get one of Europe's most technologically advanced carmakers at an unprecedented low price. As a bank we are interested in restructuring Russia's car industry and the purchasing of Opel serves that purpose,” said Sberbank head German Gref.

The rescue plan was approved by the German government early on Saturday.

“Of course nobody can exclude the risks, but I think we have found a responsible solution with private investors and interim funding from the state,” said German Foreign Minister Frank Walter Steinmeier, adding, “It is a solution which preserves [Opel’s] locations in Germany and also preserves the highest possible numbers of jobs.”

As part of the deal Germany is expected to provide a $2.1 billion loan to the company.

Analysts believe that the deal is likely to revolutionize the Russian automotive industry.

“If Russia acquires the full dealers network and engineering facilities, the original design and everything that Opel has been famous for more than a century, this would be a giant leap into the future for Russian car making industry,” said auto expert from Echo Moskvy radio station Aleksandr Pikulenko.

The agreement suggests that Russia’s Sberbank will take a 35% stake in Opel while Magna will have a 20% stake. That will give the consortium a majority, and therefore control.

“This deal shows there's a high level of trust between Germany and Russia – both on a governmental and a business level. The policies that began nine years ago, the policies of integrating Russia into the world economy are bearing fruit. Partnership with Opel is a real opportunity,” said Pavel Bykov, deputy editor-in-chief of Expert magazine.

General Motors will retain a 35% holding, the remaining 10% will go to Opel employees.

All four Opel factories in Germany will remain in operation while Russian car maker GAZ will produce over a million vehicles in Russia and Eastern Europe.