GM Board Recommends Selling Majority Stake in Opel/Vauxhall to Magna International/Sberbank; Opel/Vauxhall to Remain Part of GM Global Product Development
Ending what had extended into a longer-than-expected process of deliberation and negotiations, the Board of General Motors announced its support for a bid from the consortium of Magna International Inc. and Sberbank to buy a majority stake in its European Opel/Vauxhall operations.
Several key issues will be finalized over the next few weeks to secure the binding agreements, including the written support of the labor unions to support the deal with the necessary cost restructuring for viability and the finalization of a definitive financing package from the German government. The definitive agreements should be ready to sign within a few weeks, with closing to follow within the next few months. Under the deal, Magna/Sberbank will purchase a 55% stake in New Opel; GM will hold a 35% stake and employees will be provided a 10% stake.
The agreement will keep Opel/Vauxhall a fully integrated part of GM’s global product development organization, allowing all parties to benefit from the exchange of technology and engineering resources. The new ownership structure constitutes a new lean, efficient and independent organization for the Opel and Vauxhall brands.
Participating in GM’s global technology development and purchasing organizations secures important economies of scale for Opel/Vauxhall and other GM brands. For example, vehicles that represent new propulsion technologies, such as the Ampera extended-range electric vehicle based on the Voltec propulsion system (earlier post), can only be brought to market in a joint effort, GM says.
GM operates many joint ventures around the world and has proven in the past that this business model delivers the right balance of independence, innovation and synergies. All parties will work hard to close the deal as soon as possible—John Smith, GM Group Vice President Business Development