German government minister predicts buyer will be agreed within next few days
5 August 2009

A German government official has said that a deal to sell Vauxhall and Opel could be completed before the end of this week.

Magna International and RHJ Investments are locked in a takeover battle for Vauxhall and Opel. The buyer will be decided by parent company General Motors and the German government, which will provide the bulk of the financial aid required to keep the company running.

"We made significant progress," said Jochen Homann, Gemany's deputy economics minister, after GM and government officials met with representatives from Magna and RHJ.

"All the partners - so GM, Magna and RHJ - confirmed that they saw themselves able to see eye to eye by the end of the week."

So far GM and Germany have been at loggerheads on which bidder they prefer; Germany is favouring the Magna offer, while GM has indicated that it likes RHJ's bid.

Magna has offered to invest 350 million euros (£297m) in Opel and says it needs 4.5 billion euros (£3.8bn) in state financial guarantees. RHJ says it will invest 275 million euros (£233m) and needs 3.8 billion euros (£3.2bn) of financial aid.

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Magna wants to expand Opel's full-scale car assembly business and forecasts high growth rates, particularly in Russia, home of its bidding partner, state-controlled bank Sberbank.

RHJ aims to shrink production to return Opel to profit and may be open to selling it back to GM at a later date.

Less than two months before an election in Germany, Chancellor Angela Merkel's government fears RHJ will cut more jobs than Magna.

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