China's BAIC faces tough odds in Opel bid - report
BEIJING, July 7 |
BEIJING, July 7 (Reuters) - State-owned Beijing Automotive (BAIC) faces long odds in its bid to buy European carmaker Opel, as China remains wary of firms taking over foreign automakers, according to influential Chinese magazine Caijing.
The government's cool attitude toward such outward investment in the auto industry was the main reason Geely Automobile Holdings' (0175.HK) interest in Ford Motor's (F.N) Volvo cars was shot down, said Caijing, citing unnamed sources.
Beijing Automotive Industry Holding Corp could only get its foot in the door if the deal between Opel's bankrupt U.S. parent General Motors GMGMQ.PK and preferred bidder, Canadian auto parts supplier Magna MGa.TO, were to fall apart completely, said Caijing on its website (www.caijing.com.cn).
GM Europe President Carl-Peter Forster told a Sunday newspaper that Magna had a "considerable" advantage over rival suitors for Opel since the two sides only had to clarify details, adding he was "extremely confident" that a far-reaching agreement had been reached. [ID:nL6323825]
Magna's board had planned to approve the plan for a takeover of a 55 percent stake in Opel together with Kremlin-backed lender Sberbank (SBER.RTS). GM would keep 35 percent.
A source familiar with BAIC's bid said the Chinese automaker was offering to inject 660 million euros ($923 million) in equity for a 51 percent stake in Opel, after conducting due diligence. GM would hold the remaining 49 percent stake under the bid.
The Financial Times reported on Tuesday that BAIC aimed to rapidly expand its operations in China if it won the race to acquire Opel's business in Europe.
In a late bid for GM's European operations, submitted last week, the Chinese carmaker outlined a plan to spend $2 billion on what would become Opel's first factory in China, the British paper said.
In addition, BAIC is proposing to shut down GM's Belgian Antwerp plant and cut Opel's workforce across Europe, it said, quoting several people close to the situation.
Caijing said a crucial BAIC consideration in its bid for Opel was taking control of its intellectual property.
With Opel's technology, BAIC would be free to build Opel cars in China, the world's largest auto market and one of its fastest growing.
The China market is also one of the few bright spots for GM, however, and BAIC's plans to build an Opel plant there would put it in competition with the U.S. firm. ($=6.83 yuan) (Reporting by Kirby Chien and Lincoln Feast)
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