A few days ago, RHJ International, the Belgium-based industrial holding company interested in Opel, was moping. They said, apparently, they were not wanted anymore, were “kicked out of the bidding process.” GM and Germany were only talking Magna and maybe China’s BAIC. Guess who’s back in the game?
You guessed it.
Financial Times says that GM could sign a memorandum of understanding this week with RHJ, while talks with Magna International, the previously preferred bidder, have hit a rough patch. RHJ has improved its earlier bid and GM was “taking it very seriously”, said a person “close to the sale process.”
“GM’s negotiating team would love to see if we can get two very solid, definitive agreements sketched out from which to choose,” the person said. China’s Beijing Automotive Industry Corp is also expected to present an improved offer shortly for Opel.
In the meantime, even Sberbank, a member Magna cabal, is having its doubts. Sberbank wanted to sell its 35 percent share in Opel to GAZ. Last week, Sberbank head German Gref suddenly predicted publicly that Opel would also be a good partner for AvtoVAZ, a GAZ competitor, located in the southern Russian city of Tolyatti.
The Financial Times in turn has doubts about the sincerity of GM:
News that General Motors was seeking alternatives to Canada’s Magna to buy Opel/Vauxhall would be welcome if it were genuinely reopening the process – and about to embrace Fiat, whose bid has the most industrial logic. In fact, GM’s pursuit of a competing memorandum of understanding with Belgium’s RHJ International, an industrial holding company, seems mostly a ploy to pressure Magna to reach a final agreement by a mid-July deadline on terms acceptable to GM. Progress in GM’s Chapter 11 process also seems to be emboldening the US carmaker.
The Financial Times in turn has doubts about the sincerity of GM:
No kidding, huh? GM’s hope is that whomever gets Opel pays the most money, doesn’t want any of Opel’s IP or AR, dismantles it’s dealer network, so as not to compete with DaewooChevrolet and forgives the money GM owes Opel, all the while continuing to buy cars from GM itself.
There’s also a large amount of King of the World syndrome here, which is not healthy for a company as on the ropes as they are. GM really ought to be careful as it’s could end up with everyone walking away and/or the German government stepping in, perhaps in a way they might not like.
Beijing Automotive Industry Corp makes the most sense. The two most valuable parts of GM are Opel and GM Asia Pacific. Putting together an Auto Manufacturer out of those pieces financed by PRC money would be the true ‘Good GM’.
The rest could be divided into ‘Bad GM’ and ‘Worse GM’.
Never seen or read anything that demonstrates RHJ’s indutrial logic in this. Even though the group contains parts supply companies.
On the other hand, it seems that Sberbank are more than a little upset that GM are now saying Opel is going to need €7Bn to keep it afloat in the coming few years. The “Bank of Russia” (to use it’s more appropriate name) was only good for €500M. €100M cash to buy shares, plus a €400M loan which would convert to stock at maturity.
In other words, Magna/ Russians would not get a controlling interest in Opel until 2013. How’s that going to work for Russian Indutrial policy, to asset strip Opel and re-use it as part of the glorious make-good of the motherland?!