Fiat confirms bid for Opel as GM splits up
FIAT, one of the three bidders eyeing German carmaker Opel, confirmed it had submitted an offer for the General Motors’ (GM) owned firm ahead of yesterday’s deadline.
Two other firms; Canadian-Austrian car parts group Magna and investment firm RHJ International have also entered formal bids for Opel, which ailing GM has put up for sale as it strives to restructure.
The US parent company has a 1 June deadline to reorganise itself, and is expected to file for bankruptcy within weeks.
Although GM will decide which bidder gets Opel, the German government will also play a big role because it is likely to provide billions of euros in financing to help any buyer.
How far Berlin should go to prop up Opel, which traces its roots back to the 19th century, has become a topic of fierce debate in Germany ahead of an election in September.
Italy’s Fiat – which recently agreed to take a stake in GM’s competitor Chrysler to help the US giant develop green technology – wants to add Opel and other GM Europe assets to its mix to create the world’s second-largest auto group behind Japan’s Toyota.
Meanwhile, rival bidder Magna is considering a partnership with Russian automaker GAZ, if it succeeds in winning Opel, offering the carmaker a stronger foothold in Russia, seen as a key growth market once global economies recover.
The third bid comes from Belgium-based holding company RHJ International, which has invested heavily in Japan in the past and is focused on the auto parts sector.
Should GM be forced into bankruptcy, the German government is expected to shield Opel from creditors of its US parent until a buyer is finalised.
It has a plan to place Opel assets with a trustee and provide bridge financing until a deal is completed. But there is resistance to this solution from members of Merkel’s conservatives who are worried that the government may be over stretching itself to save a failing carmaker.