There is breaking and good news on GM, Opel and Magna front regarding Opel's sale. Germany's chancellor Angela Merkel, who was scheduled this morning, announced that GM's board supports Opel sale to Magna. GM just said that it has agreed to sell a majority stake in European automaker Opel to a Russian and Canadian consortium. GM will sell 55 percent to Magna.
Earlier this morning SHARON Sharon Terlep andBeate Preuschoff wrote in WSJ that Opel's sale to Magna International Inc. (TSX: MG.A) is recommended by GM's board. However, their story was based on the information that came from "people familiar with the matter."
Magna is a Canada based company. It is backed by a large Russian bank OAO Sberbank, and auto maker OAZ Gaz. "Canada-based Magna said it was awaiting the decision of the GM board and declined comment until GM made its decision public," writes WSJ.
If the U.S. Congress will have to have a word in the sale of Opel is not clear. While Opel is a Germany car maker, it is owned by GM and thus is a U.S. asset. Now a U.S. major asset is being sold to a foreign entity so we will have to see if Congress may have a position on Opel's sale to Magna.
Adam Opel is not only one of the largest European car makers, but also employs over 49,000 people in Europe.
Currently neither GM nor Magna have not yet made any official announcement. If everything is confirmed, this will be a very good news for Magna, which is car making industry's largest supplier of parts. Opel sale will also be relief for Germany that invested €1.5bn bridging loan to GM in May of 2009.
Written by Armen Hareyan
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