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Britain questions Magna deal
08 October 2009
Britain will not accept Magna’s takeover of Vauxhall/Opel unless shortcomings identified in due diligence report are addressed.
A PwC report had identified “shortcomings” in Magna’s plan and the government was not willing to sign off the deal unless these were rectified.
“Those need to be addressed,” said Mandelson. “If there are not to be negative consequences for Vauxhall, the plan needs to be redressed in certain ways.”
The main point of contention in the deal is believed to be the distribution of production among European car plants and the consequent job losses.
Germany is due to supply most of the loan guarantees to fund the Magna deal, but Britain is expected to supply 400 million euro (£368m) in guarantees of its own.
Before signing off the deal, however, Britain wants assurances on the fate of Vauxhall’s two UK plants, in Luton and Ellesmere Port, which employ about 5,000 workers between them.
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