Report: GM should be allowed to reconsider the sale of Opel

Article by Christian A., on August 27, 2010

EU competition head Neelie Kroes is recommending that General Motors Co. reconsider its decision to sell Opel to Magna International Inc. and its Russian partner Sberbank. Kroes' statements cannot be held lightly since the EU is tasked to enforce the EU's competition laws and may choose to block takeovers when it determines that a violation was committed.

Kroes cited the preconditions that the German government imposed on GM to select Magna/Sberbank to acquire a majority of the shares.

These preconditions are said to be incompatible with EU state aid and internal market rules. In a statement, Kroes said that GM and the Opel Trust should be given the chance to reconsider the result of the bidding process and be assured by the German authorities that aid would be given regardless of which investor is chosen. 

It was heavily anticipated that GM will be inking the deal to sell 55% of Opel to Magna/Sberbank last Thursday but it didn't happen on that day due to the EC's concerns regarding the circumstances surrounding the 4.5 billion euro ($6.71 billion) aid package offered by Germany if GM chose Magna's bid over RHJ International.

Despite GM's preference for RHJ's bid, the carmaker was pressured by the German government, which eventually convinced GM to choose Magna/Sberbank.

As the parties work on finalizing the agreement, other European countries have shown their disappointment and have gone as far as to accuse Germany of promising state aid to limit job cuts at Opel's German factories. Last Friday, Kroes sent a letter to German Economy Minister Karl Theodor zu Guttenberg with regards to the EU's concerns.

She said state financial aid is intended to resolve problems due to the economic and financial crisis and should not be used to impose political constraints concerning the location of production activities within the EU. After preliminary inquiries, Kroes found that Berlin's promised aid to New Opel was conditioned to the selection of Magna/Sberbank.

The EU also found that it was tied up to a business plan that included plans to restructure Opel plants in several countries. The EU is worried that Germany's placing of conditions influenced the decision by GM and the Opel Trust and excluded alternative plans that would have had a different distribution of restructuring measures within EU countries. [via autonews]

Topics: gm, opel, germany

If you liked the article, share on:

Comments

Recommended

Another day, another record. Is the new Dodge Challenger SRT Demon the fastest car to date? According to some sources, the Dodge Challenger SRT Demon had just beaten the Tesla...
by - April 24, 2017
Following in the footsteps of the McLaren 570S, 540C and 570GT is the newest addition to the McLaren Sports Series -- the roofless 570S Spider. McLaren 570S was rolled out...
by - April 24, 2017
The British automaker Lotus is noted for releasing low production, limited editions of its sports car lineage. Now the Hethel-based automobile manufacturer is back at it again with its latest...
by - April 24, 2017
Earlier this week, the revamped 2018 Mercedes-Benz S-Class was revealed ahead of the 2017 Shanghai Auto Show. As expected, Mercedes Benz’s flagship model is now offered in several variants including...
by - April 24, 2017
Well, this is clearly not good news for everyone. Ever since the new BMW M4 CS rolled out in Shanghai last week, several reports about its limited production have quickly...
by - April 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries