BAIC offers 660 million euros for Opel
Beijing Automotive Industry Corp. (BAIC) has made bid worth 660 million euros ($923 million) for Opel, a German newspaper said. The Chinese carmaker says its plan for the German unit of General Motors will need less state aid than a rival bid from Magna International.
BAIC Chairman Xu Heyi has written to German politicians saying his company would be an "excellent home" for Opel, according to the Frankfurter Allegemeine Zeitung's Sunday edition.
The Chinese company would turn Opel into a global brand, Heyi says in the letter, according to the newspaper.
BAIC says it would need 2.64 billion euros in financial aid from Berlin and the German states where Opel has factories. Magna is seeking 4.5 million euros in state aid for Opel.
BAIC wants a 51 percent stake in Opel and its British sister brand Vauxhall, leaving GM with 49 percent. Magna is seeking a 20 percent stake. Its Russian partner Sberbank would take 35 percent and GM would keep 35 percent. Another 10 percent of the new Opel would go to dealers and employees.
BAIC submitted a non-binding offer for Opel last Thursday and plans to make a binding offer by the middle of July, press reports have said.
Industry watchers still believe Magna's consortium is the front-runner to buy Opel but GM has said it is taking to other potential buyers for Opel including Belgium-based holding company RHJ International and BAIC, which builds Mercedes-Benz and Hyundai cars in China.
Analysts say BAIC is keen to expand out of its domestic market.
One source close to BAIC said it entered the process comparatively late because GM was reluctant to involve it in the process at all, as the U.S. carmaker does not want to create additional competition in China from Opel.
Analysts believe the only way Magna's acquisition of Opel would collapse is if Magna withdrew its bid, forcing GM to then negotiate with another bidder like BAIC.
Fiat CEO Sergio Marchionne said on June 29 that his company is still interested in Opel despite Fiat withdrawing its bid in May.
GM can no longer afford to finance Opel and is selling majority control of the carmaker, which also includes plants in Britain and Spain.
Germany, where most Opel plants are located, has provided 1.5 billion euros in finance to keep Opel alive until an outside investor is found.
