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Miguel Sebastian, Spain’s industry minister, speaking to Magna co-CEO Siegfried Wolf, right, on Tuesday in Madrid.
Sberbank president German Gref was caught off guard Tuesday when reporters told him that a deal for his bank and Magna to buy control of General Motor’s Opel unit would likely go through this week.
“It’s good you told me, I didn’t know,” Gref told reporters in Moscow, Interfax reported. “When we go to sign [the deal], we’ll announce it.”
GM chief executive Fritz Henderson, who was in China on Tuesday negotiating a possible sale of his company’s Hummer unit, said a deal was possible this week.
Gref also said an industrial partner for- Opel has not been chosen, despite widespread belief this summer that Oleg Deripaska’s GAZ had been selected. The automaker was expected to make its Nizhny Novgorod production lines available for Opel production, replacing its Volga Siber.
The Russian-Canadian consortium of and Magna was selected by GM and the Opel Trust as the preferred bidder for the struggling European unit on Sept. 10, but the deal’s terms are still being negotiated.
The consortium has said it intends to use Opel for an aggressive expansion in Russia, which was briefly Europe’s largest car market last year. But Sberbank has recently taken a much broader view of how that might be done.
The less committed stance on GAZ also comes as the government is deciding how to approach a broader restructuring of the Russian auto industry.
Last week, Gref said Magna has looked at IzhAvto and GAZ and is planning to examine the General Motors plant in St. Petersburg, the GM-AvtoVAZ production site, TagAZ, and for potential cooperation.
Magna’s plans involve selling as many as a million cars per year through the purchase and Russian partnership. With such an ambitious target, “potentially, all five companies could become industrial partners to Sberbank, since GAZ could only produce 170,000 to 180,000 cars,” said Mikhail Pak, an analyst with Aton.
While Sberbank is showing off Russia’s auto production sites, Magna is not in a position to choose its industrial partner, a source in the company said Tuesday on condition of anonymity. “It’s the decision of Mr. Gref and not a Magna decision,” the source said.
The Industry and Trade Ministry is not involved in the talks either, a ministry spokeswoman said.
The government created a commission co-chaired by Industry and Trade Minister Viktor Khristenko and Economic Development Minister Elvira Nabiullina to develop possible financial rescue strategies for the auto industry by Nov. 10.
It was not clear how the commission was taking into account the Opel purchase or whether there was coordination between its rescue strategy and negotiations on Opel production in Russia. The commission has not started work, an Economic Development Ministry spokeswoman said.
Sberbank could not immediately provide comment.
Roland Koch, prime minister of Hesse, a German state where Opel plants are located, also said he expected the signing to happen Thursday.
While the main points have been agreed upon, the financing plan for Opel is not going to be finished by then, Koch said, Dow Jones reported.
Germany, which has promised to provide 4.5 billion euros ($6.7 billion) in loan guarantees to help the Magna-Sberbank bid, will provide the aid regardless of whether other European states decide to provide money.
Opel also has plants in Spain, Belgium and Poland, while its sister parts producer, Vauxhall, has production sites in Britain. “If the agreements falter, the company can no longer be saved,” Koch said, regarding negotiations in Britain and Spain.
German media reported Monday that the signing was pushed back to Thursday because of continued negotiations with the Opel workers on pay cuts and future participation in decision making.
On Tuesday, Wolf visited Madrid to discuss job cuts at Opel’s Spanish plant with Spain’s industry minister, Miguel Sebastian, but the talks ended without a deal because a local labor union did not approve of Magna’s industrial plan for Opel, Dow Jones reported.
Workers are set to receive a 10 percent stake under the deal.
Magna and Sberbank are buying 55 percent for 500 million euros, while the rest will be kept by General Motors.
Magna co-CEO Siegfried Wolf said Monday that 170 million euros would be invested into Russian operations by Magna and Sberbank.
