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Friday, May 29, 2009

Magna to buy GM Europe

According to BBC News, Magna International has reached an agreement in principle to rescue GM Europe’s Opel and Vauxhall operations. The other potential bidder, Fiat, said it would not attend Friday’s talks with the German government. Magna, however, must still get German government clearance for the deal.

Assuming the government approves the deal gains, Magna will reportedly inject between €500 million and €700 million into Opel, and will cut 2,500 jobs in Germany, about 10 per cent of Opel’s workforce. Magna’s UK plans are not known.

General Motors is expected keep a 35 per cent share in the company, while 10 per cent would be employee owned.

Magna’s bid is backed by Russia’s state-run Sberbank and Oleg Deripaska's truck firm Gaz.

© 2009 Russell G. Campbell

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