General Motors is edging closer to a deal with RHJ International after it claimed the Magna deal would have too many obstacles to overcome.
GM’s chief negotiator John Smith wrote on GM Europe’s website that the bid from Magna “contained elements around intellectual property and our Russian operations that simply could not be implemented”.
Magna’s bidding partner is Sberbank, the Russian state-owned bank, and its bid is believed to contain plans to sell and manufacture more cars in Russia.
“GM has partners in other parts of the world who have joint ownership of these assets... We simply could not execute the deal as submitted,” added Smith.
Smith said RHJ's bid would offer “a much simpler structure and would be easier to implement”. Furthermore, the RHJ bid would require less state aid than Magna’s offer and it wouldn’t infringe on any of GM’s global deals.
“This remains a reasonable and viable option to be considered as the very difficult issues around the Magna negotiations continue to be worked,” said Smith.
“We remain fully open to working these issues to a conclusion, but we cannot say when that process will conclude, other than to say, as soon as possible.”
Despite seeming to favour RHJ’s bid, Smith insisted that GM did not currently prefer either of the bidders and he said it was working with Magna to come up with a deal which would be easier for it to implement.
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