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Magna and Russian bank set to takeover Vauxhall

Vauxhall and Opel are to be acquired by Canadian parts firm Magna and Russian state-owned bank Sberbank.

It is believed that Magna, Sberbank and General Motors have signed a memorandum of understanding in Germany broadly agreeing to undisclosed terms to share the ownership of Vauxhall and Opel between them. GM will retain a stake in GM Europe in the deal.

Business secretary Lord Mandelson said is demanding an early meeting with the potential new owners to find out what Magna and Sberbank’s plans are for GM’s European operations. He also wants guarantees that Vauxhall production will remain in the UK.

"The expectation is that manufacturing will be kept in the UK," said Alistair Beveridge, automotive specialist at Zolfo Cooper.

"But they could possibly scale back production in the UK or Germany if there is not enough demand," he added.

GM bankruptcy in the US

GM in the US is facing further issues this week as it has filed for Chapter 11 bankruptcy protection.

Beveridge said that between talk of bankruptcy and the Magna/Sberbank deal, consumers would be wondering if their vehicle warranties would be covered.

He added that the new owners for GM in Europe would want to quell any negativity as soon as possible, to ensure consumers were behind the brand.

Although Magna and Sberbank are the headlining bidders, Opel and Vauxhall will have to do their due diligence before a formal deal can be signed.

GM itself is facing further issues this week as it has filed for Chapter 11 bankruptcy protection.

 

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