GM Says Magna, Sberbank to Acquire Opel

FILE - In this March 11, 2009 file photo a man passes a poster showing logos of carmaker Opel, owned...

FILE - In this March 11, 2009 file photo a man passes a poster showing logos of carmaker Opel, owned by General Motors Corp., in an exhibition in the automotive museum in Eisenach, Germany. German workers and politicians waited anxiously Wednesday, Sept. 9, 2009 for a decision by the board of General Motors Co. on the fate of its Opel unit, with thousands of jobs at stake and national elections less than three weeks away. (AP Photo/Jens Meyer, File)

(AP)

General Motors Co. will sell European unit Opel to Canadian auto parts maker Magna International and Russia's Sberbank in a deal that preserves GM's ability to develop new cars with its longtime subsidiary.

The announcement Thursday was a politically charged win for German Chancellor Angela Merkel, who saw the deal as the best change to save jobs at a major employer less than three weeks before national elections on Sept. 27.

GM will see a 55-percent stake in Adam Opel GmbH transferred to the Canadian-Russian team but will keep 35 percent for itself, with 10 percent held by the workers. Opel had been placed in a trust with Germany holding 65 percent and GM 35 percent to keep it from being drawn into GM's restructuring under bankruptcy protection in the U.S.

The deal still depends on conditions that could take weeks or months to work out, such as final agreement for government financing and union support for what could be painful cuts, with chief GM negotiator John Smith indicating Opel plant in Antwerp, Belgium, could be wound down.

The announcement offers some clarity to workers fearful about their jobs as the talks dragged out for months.

"My son has been asking me every day for the last nine months for how much longer I will still have a job," said Werner Karnitz, 52, a worker at the Opel plant in Bochum, Germany.

GM once favored a rival bid by investment firm RHJ International, in part for fear that Magna and Sberbank could create competition for Chevrolet in Russia, a key market. More recently, GMs new, post-bankruptcy board had ordered management to consider more options, including keeping Opel, in part over worries that the company could lose control of shared GM-Opel technology and patents to competitors.

But German government support appeared decisive in the end. Merkel and the German government backed the bid by Magna and the Russian state-backed lender, giving euro1.5 billion ($2.2 billion) in bridge financing to keep Opel afloat and offering euro4.5 billion more in credit to complete the deal.