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Chinese bid for GM Europe
Beijing Auto lodges bid for Opel/Vauxhall, but could go for Volvo instead
6 Jul 2009
CHINESE car-maker BAIC has made a late bid for General Motors’ European divisions, Opel and Vauxhall, with an offer that requires 41 per cent less government aid than that of rival bidder Magna International.
BAIC (Beijing Automotive Industry Corp) last Thursday submitted a non-binding offer of €660 million ($A1.16 billion) for a 51 per cent stake of Opel/Vauxhall – just ahead of GM’s deadline – and reportedly plans to submit a full binding offer by July 15.
The Chinese company is also said to be in discussions with Ford to buy Volvo, but will reportedly buy only one of the groups, not both.
BAIC plans to turn Opel into a global brand, according to a letter written to German politicians by company chairman Xu Heyi and leaked to a Frankfurt newspaper, suggesting the historic Vauxhall name may be dropped.
Furthermore, BAIC promised it would need only €2.64bn ($A4.64bn) in state aid compared with the €4.5bn ($A7.91bn) sought by Magna and its Russian partner bank.
Nevertheless, Magna remains the favourite to buy the embattled GM Europe operation ahead of BAIC and Belgian-based holding company RHJ International.
BAIC builds Mercedes-Benz and Hyundai cars in China and is apparently keen to expand outside its domestic market, despite the Chinese government reportedly frowning on global automotive acquisitions.
Industry insiders suggest that the talks with BAIC and RHJ are mainly designed to put pressure on Magna because talks aimed at thrashing out the final deal with the giant Canadian parts-maker have bogged down over rights to the Chevrolet brand in Russia and GM wanting a buy-back clause.
The paper that broke the BAIC story, Frankfurter Allgemeine Zeitung, quoted GM Europe boss Carl-Peter Forster as saying that Magna has a “considerable lead” over the other bidders.
“The only thing remaining is for the details to be agreed,” Mr Forster is reported as saying, adding that other candidates would stimulate the process.
Read more:Opel and Vauxhall fall to Magna, Russia
Seven buyers looking at Opel, Vauxhall
GM break-up accelerates
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