General Motors is ‘reasonably confident’ that a deal to sell Opel to Magna International and Sberbank will be signed this week despite a warning by the European Union that the proposed sale might breach state aid rules, Fritz Henderson, GM’s chief executive, said in an interview on Monday.
‘The German government is in dialogue with the EU, and that’s kind of in their job responsibility code, if you will,’ said Henderson. GM, meanwhile, is now working to finish the remaining items in its negotiations with Magna and to work with the German government on terms of the deal’s financing.
Henderson said keeping Opel was one of GM’s fallback plans if necessary, but said the best option was to close the deal with Magna. As for other potential buyers of the asset, he said ‘there is no one else out there’.
‘We’ve had a number of exhaustive discussions with our board on the deal, the rationale for it, and the need to support the Magna transaction,’ he said. ‘If facts fundamentally change, we would go back and consult with our board. But right now, we’re spending all of our time trying to get the Magna deal closed.’
Neelie Kroes, the EU’s competition chief, threw the sale into disarray on Friday when she said in a letter to German Finance Mnister Karl-Theodor zu Guttenberg that Berlin’s financial aid for the spin-off appeared to be conditional on Magna and Sberbank winning control, and thus could violate the bloc’s antitrust rules.
A spokesman for the German government trust managing Opel said on Monday that it had based its decision to approve the sale to Magna and Sberbank purely on economic grounds.
He said that it was up to the German government to clarify any concerns with Brussels. ‘We expect that the process will not need to be restarted,’ the spokesman said.
The European Commission said that it had seen a copy of a letter sent on Saturday by Germany’s government to GM and the Opel trust assuring them that the ?4.5bn of government aid for the deal was not dependent on Magna and Sberbank being the winner, and was available to all bidders.
RHJ International, the other shortlisted bidder until GM chose Magna in September, on Monday ruled out renewing its interest. ‘RHJ has absolutely no plans to revive its Opel bid,’ a spokesman for the Brussels-based investment group said.
Source: Financial Times