BAIC Prepares Bid for Opel

Chinese manufacturer BAIC seems to be really enthusiastic with its plans to take over the German ailing unit Opel and is now finalizing a takeover proposal expected to be submitted to General Motors in the next few days. The information, revealed yesterday by the Wall Street Journal, is backed by a person familiar with the matter who also confirmed GM and BAIC held talks last week.

Beijing Automotive Industry Holding Corp., or shortly BAIC, already confirmed its interest in buying Opel and, together with RHJ International, is regarded as the main favorite to takeover the German manufacturer in case Magna negotiation fail.

Klaus Franz, head of the Opel works council, told the Wall Street Journal that letting Opel step under the patronage of Chinese companies might be a bad idea. "They only want technology and have no experience in global auto production," the paper reported Franz as saying.

Separately, GM Europe is currently holding talks with several other parties, while negotiations with Magna International continue.

“We’re in very active negotiations with several potential partners including Magna, Beijing Auto and Ripplewood,” Chris Preuss, a GM Europe spokesman, was quoted as saying by Bloomberg. “I wouldn’t comment at this point on the status of the talks or the specific details of the negotiations other than to say we have very strong interest in Opel from all the parties involved.”

On the other hand, Magna expects to get the final signing and close the Opel deal by mid-September. "We think that we will be finished in the next four, five weeks and then there's the final signing," Magna co-Chief Executive Siegfried Wolf said. "After the signing, all approvals have to be given, and I think that we can expect a closing in September, end-September."