GM to sell Opel to Canada's Magna

11th September 2009, Comments 0 comments

German Chancellor Angela Merkel said that she was happy with the decision and that it was “along the lines of what the government wanted.”

Berlin -- German Chancellor Angela Merkel said Thursday that US automaker General Motors had agreed to sell its Opel unit to Canadian auto parts maker Magna, the buyer she has favoured for a major employer here.

"I would like to inform you that the head of the chancellery was informed a short time ago by (GM chief Fritz) Henderson that GM's board has decided to sell Opel to Magna under the terms we had negotiated," she said, hailing a decision just over two weeks before a German federal election.

"I am exceptionally happy about this decision, which is along the lines of what the government wanted," she told reporters ahead of a GM press conference in Berlin at 1415 GMT.

With GM's decision, Magna and its Russian financiers Sberbank beat out a bid by Belgian investment fund RHJ International.

Germany is home to some 25,000 Opel workers, about half of GM's total European workforce, and the saga over the carmaker's future has loomed large in Merkel's campaign for re-election on September 27.

The powerful head of Opel's works council, Franz Klaus, had already warned of a "cost cutting orgy" if GM decided to hang on to Opel and threatened protests if German factories were closed.

Merkel said German negotiators' "patience, determination and clarity" had paid off in the months-long negotiations.

She said that she would speak with other European leaders in countries with Opel plants to discuss "burden-sharing."

Germany has already ponied up with a 1.5-billion-euro (2.2-billion-dollar) bridging loan to Opel to keep the company afloat and the promise of 3 billion euros in loan guarantees for Magna.


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