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GM: 'Magna issues unresolved'
06 August 2009
Magna's bid to buy Vauxhall and Opel continues to be dogged by difficulties getting its investors to agree on the terms of the deal, according to the GM executive negotiating the sale.
GM is negotiating with two potential buyers of Vauxhall and Opel: RHJ International and Magna.
Following talks, RHJ is said to be GM's preferred bidder, while the German government, which holds considerable sway in the discussions as it will provide substantial financial support to the eventual buyer, is reported to favour Magna.
Writing in his official GM blog, John Smith, GM Group Vice President and GM’s chief negotiator for the sale of a stake in Opel/Vauxhall, said: "As the RHJI proposal is the simpler of the two, there were very few significant issues with this offer, so most of our time has been spent working with the Magna/Sberbank team.
"The Magna proposal is more complex, owing to the inclusion of Russia and a third, Russian-based investor. We started the week with about 30 issues to resolve, including New Opel involvement with Chevrolet in Russia, intellectual property transfer rights in Russia, advanced technology access, product development responsibilities, minority shareholder rights and other items.
"I can report some progress, resolving perhaps one-third of the issues during a first day of talks. However, the difficulties of getting to ‘yes’ with three parties in the room were very much in evidence yesterday. Little progress was made in whittling down the outstanding issues, in part reflecting the return of some issues that we previously considered to be resolved.
"Russia, intellectual property, product development responsibilities and various governance issues are among the unresolved issues, many of them on the table for some time now. There are no such issues to resolve with the RHJI proposal which, as noted previously, is both simpler and requiring less government-backed funding compared to Magna/Sberbank."
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