Beijing Auto not favorite bidder for GM Opel

Shanghai, July 23 (Gasgoo.com) General Motors and the German government yesterday failed to choose a buyer for GM's German unit Opel, as Germany preferred Canadian auto-parts supplier Magna while GM was in favor of Belgian investor RHJ, not taking the third bidder, China's Beijing Auto, into serious consideration, media reported.

At Wednesday's meeting, German officials "made clear that we have a preference for Magna," Germany's Deputy Economics Minister Jochen Homann told reporters afterward. He added that the government's endorsement is conditional on further concessions, in particular an increased capital commitment by Magna and its Russian partners.

Magna and the Russians have offered to invest €500 million ($711 million) of their own money in Opel, with €100 million to be paid by the signing of the deal and €400 million in loans, which would gradually be transformed into equity. The consortium is seeking a 55% stake in Opel.

RHJ International has offered to invest €275 million for a 50.1% stake in Opel, requesting €3.8 billion in government funding. GM is understood to favor RHJ's bid for Opel.

Beijing Auto's preliminary offer was valued at €660 million for a 51% stake in Opel and it asked for €2.64 billion in German government guarantees. But Homann said that the bid by Beijing Auto was losing ground in the running compared with the bids from Magna and RHJ.

Industry analysts said the German government has limited confidence in the international management capability of Beijing Auto while GM is not willing to sell its Opel brand to a Chinese carmaker to rival its profitable ventures with China's auto giant SAIC.

A recommendation on a partner is expected by the end of the month. GM aims to finalize a deal by the end of the third quarter after being forced to seek partners for the unit to access state aid to keep the business running.