Germany Agrees with Magna to Save Opel

30 May, 2009 04:47:00

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German government and Magna-led consortium have reached an agreement that could rescue ailing German carmaker Opel and save as many European jobs as possible.

Under the agreement, Magna will take a 20 percent stake in Opel and the Russian-owned Sberbank will take a 35 percent stake, giving their consortium a majority. GM will retain a 35 percent holding, while the remaining 10 percent will go to Opel employees.

The deal, spearheaded by Magna and backed by Russia's state-controlled Sberbank, will see Russian automaker GAZ making Opel vehicles in Russia, as well as maintain Opel and Vauxhall production elsewhere in Europe.

Opel and sister brand Vauxhall also have operations in Belgium, Spain and Poland among other countries.

As part of the deal, all four factories in Germany will remain in operation, although Magna has said previously it will need to shed some 2,500 jobs.

The German government and several state governments will provide a euro1.5 billion ($2.1 billion) bridge loan, part of which will be available immediately.

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