May 30, 2009

Germans announce Opel rescue agreement

Canadian auto supplier Magna International and General Motors Corp. have reached an agreement to rescue German automaker Opel, officials said Saturday.

German Finance Minister Peer Steinbrueck announced in Berlin that Magna will acquire a 20 percent stake in Opel while Russia's state-owned Sberbank and car maker GAZ will take a 35 percent slice, making the consortium a majority shareholder, RIA Novosti reported.

We have an agreement, Steinbrueck said after a series of late-night negotiations between U.S. and German government officials, GM and Magna, the Russian news agency said.

GM would retain 35 percent and Opel employees would control 10 percent of the company, The New York Times reported Friday.

Italian automaker Fiat withdrew from the negotiations when it balked at putting up cash when GM revealed it had a $145 million shortfall with Opel. In a statement, Fiat Chief Executive Officer Sergio Marchionne said the deal would expose Fiat to unnecessary and unwarranted risks.

But Magna said it would add $422 million to its bid after GM announced the shortfall, the Times reported.