GM to get a bailout from Magna
Frank Stronach’s auto parts firm to buy 20 per cent of GM’s European branch
Opel, the European branch of GM, is set to sell 20 percent of its shares to Magna International, a Canadian-Austrian car parts and assembly company. The deal is meant to save Opel from collapsing after GM’s bankruptcy in the US and a projected 1.5 billion euro loss this year. Magna will be paying $2.3 billion dollars worth of bridge financing for the deal. The company is in close talks with Russian automaker Gaz, and is hoping to turn a profit by gaining access to the Russian market. Magna’s bid is hoped to minimize job losses for the 50,000 Opel employees in Europe. The deal should be approved by the German government later today, beating out a proposed merger between Opel and Fiat, the Italian automaker.
