Reports suggest non-binding bid has been lodged; Magna claims a deal is nearly done
3 July 2009

BAIC has submitted a non-binding offer to buy Opel/Vauxhall from GM, with a binding one set to follow in the coming days, according to sources.

Canadian parts supplier Magna already has a deal in place with GM, but GM has now confirmed it is talking to other interested parties believed to include BAIC, Fiat and Belgian private equity firm RHJ International.

BAIC’s non-binding offer is reported to be just two pages long and lacking detail on its intended plans for what to do with Opel/Vauxhall. The Chinese state owned manufacturer currently has deals with Daimler and Hyundai to build cars in China.

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Reports suggest that BAIC will follow up its non-binding offer with a binding one by the middle of July. Opel has already spoken of its reservations about a BAIC takeover, claiming it is only interested in buying its technology.

Magna’s funding partner Sberbank has dismissed reports that its deal for Opel/Vauxhall may collapse, with its CEO saying the race was all but over.

Mandelson’s Vauxhall pledge

Magna sources have today said that its issues with GM, believed to involve pension scheme payments, potential job losses and conflicts of interests with other manufacturers, will be resolved by 7 July.

The source said many of the points were ironed out at a meeting last week between GM CEO Fritz Henderson, lead GM negotiator John Smith, Magna co-CEO Siegfried Wolf and Magna Chief Operating Officer Herbert Demel.

“The only remaining issue is whether New Opel gets the sales distribution rights to GM's Chevrolet brand for the Russian market, but a solution should be achievable here,” the source said. “They came significantly closer to one another in the key points.”

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