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BAIC Enters Bid for Opel

Putting an end to recent talk of their possible bid for Opel, Chinese manufacturer BAIC has made a take-over offer for German brand Opel. According to a German newspaper, quoted by Autonews, the Chinese are willing to pay 660 million euros to GM for Opel, as well as asking less government money than rival Magna, Autonews reported.

BAIC says it needs 2.64 billion euro from Germany, while Magna demands 4.5 billion. BAIC will also take only 51 percent in Opel and Vauxhall, leaving GM with 49 percent. Magna's deal on the other hand calls for a 55 percent stake for itself and Russian Sberbank, 10 percent for the workers/dealers and the rest of 35 percent for GM.

The non-binding offer was made by BAIC on Thursday and the plan is to submit a binding offer by the middle of this month. Very inconvenient for Magna, which hopes to conclude the deal by about the same time.

Analysts, however, say that Magna still leads the race. The main argument on which the analysts base their opinions is that by giving Opel to the Chinese, the brand would become unwanted competition for GM's vehicles in China. BAIC has already stated that it plans to make Opel "a global brand".

On the other hand, it is unclear whether GM wants a bigger stake in Opel than the one proposed under the Magna deal. GM's assets sale has yesterday been approved in US bankruptcy court and, as they repeatedly stated, Opel was placed on the company's "bad asset list". The American manufacturer no longer affords to provide financing for Opel.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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