[LINK] "GM opts for Magna in Opel deal"

[rfmcdonald]

This news wasn't very surprising, but still: a Canadian firm now owns a huge chunk of the German automobile industry. Wow.

General Motors is to sell Opel, its lossmaking European subsidiary, to Canada’s Magna International and Russia’s Sberbank, ending months of uncertainty over the carmaker’s fate that had threatened to overshadow this month’s German elections.

Angela Merkel, Germany’s chancellor, whose government threw its weight behind Magna’s bid, welcomed GM’s decision on Thursday, saying the result showed the government’s “patience, clarity and decisiveness” had paid off.

Under the agreement, Magna and Sberbank will take a 55 per cent controlling stake in Opel, GM’s European employees will take 10 per cent, while GM itself will retain a minority 35 per cent stake. Magna has promised to extend Opel’s reach into Russia via an agreement with Gaz, the carmaker owned by the Russian tycoon Oleg Deripaska, to build Opel-derived cars there.

GM’s decision surprised German government officials and even some executives at Magna and GM, after conflicting signals in recent weeks from the carmaker, which had been weighing up a plan to keep Opel after talks with Berlin hit obstacles over conditions attached to its financing of the deal.

The Detroit carmaker’s 13-member board failed to endorse the Magna bid last month, but agreed to the deal at a second meeting on Wednesday after a “deep dive” into data about the sale, according to a person involved in the talks.