German solar company bids for GM factories
Green potentially meets GM in a takeover offer that proposes to save the world's biggest but troubled automobile manufacturer.
Bonn -- A 'David-and-Goliath' like takeover offer for the German factories of General Motors sent the share price of the bidding company, SolarWorld, crashing 16 percent lower on Wednesday.
SolarWorld, which assembles and installs smaller electricity generating systems that rely on wind or the sun, asked GM to give it four factories, a German research centre, the Opel brand and 1 billion euros (1.25 billion dollars).
The Bonn based company said it would inject an additional 1 billion euros of its own cash and loans to convert Opel into "Europe's first green automobile maker," designing cars with low emission engines.
US based General Motors promptly rejected the bid. In Detroit, a GM spokesman said Opel was not for sale and claims otherwise were "pure speculation."
GM, the world's biggest automobile manufacturer, took over Adam Opel 80 years ago.
SolarWorld AG, based in Bonn, Germany, demanded a 40,000 euros sum from General Motors for each Opel employee it took over, amounting to "compensation" of 1 billion euros.
SolarWorld offered to invest 250 million euros cash in the takeover and raise 750 million euros in bank loans, provided that banks were given a federal government guarantee for the sum.
As of early afternoon, SolarWorld stock was trading at 13.66 euros, down 16 percent from Tuesday's close in Frankfurt.
A German government spokesman declined substantive comment on the call for guarantees, saying there was nothing to discuss unless the two companies actually opened negotiations.
SolarWorld chief executive Frank Asbeck said it was a serious offer. His company had 1 billion euros in reserve, he added.
SolarWorld has a payroll of 2,254 people while Opel, with its main office in a Frankfurt suburb, has more than 10 times as many: 25,700.
General Motors has seen its share price plunge amid bankruptcy fears. Opel has asked for German state aid, but German politicians have been reluctant to help in a way that indirectly benefits the parent.