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Germany says EU concerns don't endanger Opel deal
Published in Saudi Press Agency on 17 - 10 - 2009


Economy Minister Karl-Theodor zu
Guttenberg expressed confidence on Saturday that Germany could
address EU concerns about a sale of carmaker Opel to Canada's
Magna, saying they did not put the deal at risk, Reuters reported.
The European Commission announced late on Friday that
Competition Commissioner Neelie Kroes had written to Guttenberg
voicing doubts about Germany's offer to provide 4.5 billion
euros in financial aid for Opel as part of the deal with Magna.
In the letter, Kroes said there were "significant
indications" that Germany had made the aid for Opel contingent
on Magna being chosen as the winning bidder -- a stance that
would run counter to EU competition rules.
Speaking to reporters in Berlin on Saturday morning,
Guttenberg said the deal was "on track" and voiced confidence
that Germany could resolve the questions raised by Kroes.
Asked whether her concerns could doom the sale to Magna, he
replied: "No, I don't believe that."
Magna, a car parts group whose bid for Opel is backed by
Russian investors, had been in competition with private equity
investor RHJ International, and before that with Fiat and
China's BAIC, for control of the General Motors unit. RHJ was
not immediately available for comment.
But the German government said repeatedly it had a "clear
preference" for the Magna bid as it offered Opel the most
promising future and would protect German jobs.
It linked its offer of 4.5 billion euros in aid for Opel to
a Magna takeover, with Chancellor Angela Merkel promising to
intervene, if necessary, to ensure Magna won the bid battle.
Under pressure from Germany, GM chose Magna as its preferred
bidder last month. Under a deal that had been expected to be
signed this week but was delayed amid EU doubts, GM plans to
sell a 55 percent stake in Opel to Magna and Russian state-owned
bank Sberbank.
GM would retain a 35 percent stake in Opel under the deal
and workers would hold the remaining 10 percent.
Kroes said GM and the trust set up to keep Opel separate
from its U.S. parent's recent bankruptcy in the United States
should be allowed to reconsider the decision to sell to Magna.
"GM and the Opel Trust should be given the opportunity to
reconsider the outcome of the bidding process," Kroes said in
the statement.
If GM is forced to reopen the bidding for Opel, or the
closing of the deal faces significant delays, Opel could face a
cash crunch based on previous projections by the automaker.
"GM is very fragile. An Opel bankruptcy and loss of numerous
jobs is a realistic scenario if the sale is stopped," said
Ferdinand Dudenhoeffer, an auto expert at Duisburg-Essen
University.
Although the European Commission's official term ends this
month, Kroes will still be able to take action in cases such as
Opel in the interim period before the new EU executive is
appointed early next year.
But she has yet to block a state aid deal during the
economic crisis, nearly all of which were to rescue banks.
In the case of Commerzbank, for example, she ordered the
sale of a business the lender itself was keen to offload as a
condition for getting government help.
But experts warned the threat on Opel could derail the deal.
"If Kroes' major concern is that others have an equal
opportunity to bid and to benefit from state aid from the German
government, then this constitutes a major roadblock," said
antitrust lawyer Martin Bechtold at Allen & Overy.
A GM spokesman said completing the Opel sale would require
the German government to win clearance for its proposed
financing and for union workers to agree to cost cuts.
Opel employs about 50,000 workers in Europe. About half are
in Germany and other plants are in Britain, Belgium, Poland and
Spain.
Klaus Franz, head of Opel's works council in Germany, echoed
Guttenberg's comments, saying he did not believe the EU's doubts
changed the situation. Juergen Ruettgers, premier of the German
state of North Rhine-Westphalia, home to an Opel plant, insisted
the agreement did not contravene EU rules.
"No site was given favourable treatment in the plan --
either in Germany or elsewhere," he told reporters.


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