GM has failed to reach a decision to sell Opel and its British sister brand Vauxhall to either Canadian automotive firm Magna International, Germany’s preferred buyer or to Brussels-based private equity firm RHJ International.
The deal has dragged on for months and has recently received input from German chancellor Angela Merkel. As the government favours the Russian Magna deal over the Belgian private equity firm’s offer, the government has said it will allocate €4.5bn (£3.9bn) to Magna to encourage a swift conclusion.
Although it is considered second rate to Magna’s offer, the RHJ’s deal is more beneficial to UK jobs as the private equity firm has said it will not shut factories in Luton and Ellesmere Port saving 5,000 jobs, whereas Magna has made no such promise.
Adding further confusion to the deal, sources have told Reuters that GM was considering a plan to raise US$4bn to keep Opel rather than selling the unit to Canadian automotive group Magna International.