Canadian company favourite in race for Germany’s Opel

23rd May 2009, Comments 0 comments

The fate of Opel, an industrial icon dating back to the 19th century and which directly employs around 25,000 people in Germany, has become a hot-button political issue with barely four months to go until general elections.

Frankfurt -- Canadian auto parts maker Magna is in pole position in the race to take over struggling General Motor's German subsidiary Opel, a key local politician said Friday.

Magna's offer "responds best to the needs" of the public authorities and the workers, said Roland Koch, premier of the state of Hesse, where Opel's headquarters are situated.

On the other hand, Italian giant Fiat's bid is "a long way" from what authorities had hoped for, Koch said.

The third bidder in the race, RHJ International, whose main shareholder is the founder of the US investment fund Ripplewood, has placed a "very interesting" offer, he added.

The German government is expected to announce its preferred bidder either on Friday or early next week.

However, a spokesman for Chancellor Angela Merkel played down speculation on Friday.

Speaking at a regular briefing, Thomas Steg said: "The government has received three bids. We are assessing these bids internally. We are not going to take part in public speculation about these assessments."

Steg said that senior government officials, including Merkel, would meet later Friday to discuss the assessments and come to a "preliminary political evaluation."

He added that it was "completely open" as to whether a final decision would be taken following this meeting.

"We are in the middle of a process and we cannot at this time give something like a... ranking or a government preference because the political leaders are only dealing with the issue this afternoon," he emphasised.

The final decision on Germany's Opel, as well as other units of GM's European operations, including Vauxhall of Britain and Saab of Sweden, lies with GM itself and the US government, but Berlin will sweeten any deal with loan guarantees.

Magna and RHJ were expected to ask for five billion euros (seven billion dollars) in guarantees while Fiat was reported to be requesting seven billion euros.

The Canadian firm is also the candidate preferred by GM, according to press reports.

German magazine Der Spiegel, citing internal GM documents, said in its online edition Thursday that Magna was favoured because of its technological know-how, having helped develop the all-terrain BMW X3 model.

The fate of Opel, an industrial icon dating back to the 19th century and which directly employs around 25,000 people in Germany, has become a hot-button political issue with barely four months to go until general elections.

Chancellor Angela Merkel, up for a second term in the September 27 vote, is prepared to pull out all the stops to save Opel from collapse but being seen as writing a blank cheque on behalf of taxpayers could hurt her re-election hopes.

AFP/Expatica

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