Canadian-Russian Group Wins Opel
The rule made no official comment on the winning bid by a consortium of Sberbank, GAZ and Canada's Magna International to buy U.S.-controlled Opel in a deal that promises to give a huge boost to the Russian car industry.
But Prime Minister Vladimir Putin's publication at a church Saturday just hours after the sale was announced spoke volumes. Putin showed up driving his antique GAZ-21.
Putin drove the gray, Soviet-era Volga model to a foundation-laying ceremony for a Russian Orthodox church in the village of Usovo in the Moscow region. After the ceremony, Putin gave Russian Orthodox Patriarch Kirill a lift to his Novo-Ogaryovo residence.
A Putin spokesman denied that there was a link between Putin's decision to drive the car and the multibillion-dollar sale, which will give Sberbank a 35 percent stake in Opel and GAZ the status of "industrial partner."
"Vladimir Vladimirovich's driving of the Volga on Saturday had no coupling with the Opel deal," spokesman Dmitry Peskov said Sunday. "He usually drives it when he goes somewhere on his own business."
But Putin has rarely been seen driving the car off Novo-Ogaryovo's grounds, where he gave former U.S. President George W. Bush a ride shortly after acquiring the vehicle in 2005.
In a country where leaders' actions often speak louder than words, some saw Putin's spin on Saturday as something of a victory lap.
"Putin must have driven the GAZ to symbolize Russia's victory," said Dmitry Oreshkin, an autonomous political analyst. "This kind of symbolism was used by the Soviet supervision. It may be cheered by some Russians but frowned upon by foreigners."
The German oversight chose the Russian-Canadian consortium to buy General Motors-controlled Opel early Saturday, ending more than a month of tense negotiations brokered by German Chancellor Angela Merkel and overseen by U.S. President Barack Obama. The deal saves Opel from the planned bankruptcy of GM, which is expected to be filed Monday.
State-owned Sberbank said Saturday that the deal would give Russia's car industry access to new technologies, while Oleg Deripaska's GAZ said it wanted to organize the preparation of Opel cars at its plant in Nizhny Novgorod.
The consortium's biggest adversary was Italy's Fiat, which called the talks "a Brazilian soap opera" and withdrew its bid just hours before the decision was announced.
In a sign of how high the stakes were, Italian Finance Minister Giulio Tremonti declared that Fiat had lost the bid just because it played by market rules, while the German economy minister offered his notice.
As part of the deal, Magna, a car parts producer, will get 20 percent of Opel while GM will keep 35 percent and Opel employees will get 10 percent.
Magna will lend Opel 300 million euros ($424 million) to cover short-term needs on Tuesday, while the Canadian company and Sberbank are to invest 500 million to 700 million euros into Opel later. (For more details of the deal, see the table on p. 2.)
Magna co-chief executive officer Siegfried Wolf said he expected a final contract with GM within four to five weeks, Bloomberg reported.
It was not without hesitation clear how much money Sberbank was ready to invest in Opel. Sberbank chief German Gref said Saturday that he saw the deal as a big opening for Russia's car industry. "This is a great chance for Russia to get one of the most technologically advanced European carmakers at an unprecedented low price," Gref told state-run Vesti video.
"Such an asset would make it possible to restructure the Russian car industry," he said.
Gref gave no further details of the deal. A Sberbank spokeswoman declined further comment on Sunday.
A GAZ spokeswoman said GAZ would need about nine months to retool its plant and plans to produce up to 180,000 Opel cars a year there beginning in 2010.
"We will keep our put together facilities busy thanks to this," said the spokeswoman, who spoke under condition of anonymity in line with company policy. "This will also allow us to rise to a higher technological level in fabrication."
No specific Opel models have been chosen for making, which will be organized on the conveyor where the Volga Siber sedan is now produced, the spokeswoman said. The output of the model was launched in July but suspended several times since because of low demand. "It hasn't been decided whether we will fully stop the fabrication of the Volga Siber when we begin to make Opels or continue to produce it in parallel," the spokeswoman said.
The origination site that GAZ wants to use was constructed by Magna. "It has 85 percent automated equipment that ideally will be completed with Opel's technology," the spokeswoman said.
GAZ owner Deripaska bought a 18 percent stake in Magna for $1.54 billion in May 2007 but was forced to cede it to bankers in September of last year.
Magna said it also wanted to produce Opel cars. "We want to build Opel cars in Canada," Magna chairman Frank Stronach told Toronto-based Globe and Mail. "If we don't change the culture, North America's got no chance to be in the automobile industry, unreservedly no chance." Magna will become Canada's second-largest producer after the merger.
Mikhail Pak, an analyst with Metropol Group, said Opel would be welcome on the Russia market. "In the economy class, it will become a opposition for Ford Focus and Honda Civic," Pak said. "Magna will get a bigger share on the market in Russia by providing Opel service centers with car parts."
Pak said Sberbank's motives for participating in the deal may have been purely financial. "The bank may want to sell its share at a higher price later," Pak said.
Fiat withdrew its bid for Opel on Friday, saying in a statement that it hadn't been provided with enough financial tidings and felt that last-minute additional funding requests could expose it to "unnecessary" risks. It pledged assets but no cash in its bid.
Fiat CEO Sergio Marchionne extended his criticism at a news colloquy Friday. "This process is taking on the air of a Brazilian soap opera," he said in Montreal.
Tremonti, the Italian finance minister, said late Friday that Fiat might have lost its bid because it played by market rules and didn't ask for state support.
"Fiat did not ask the Italian control for anything," Tremonti said on the state-run RAI TV channel. He said Fiat "went to Germany to play according to market rules."
Italian Prime Minister Silvio Berlusconi "could have done a lot using his influence" had Fiat approached him for help, Tremonti said.
Further underlining the drama of the contention, German Economy Minister Karl-Theodor zu Guttenberg offered his forgoing over the government's decision to pick Magna over Fiat, news reports said. Guttenberg did not support the sale to Magna because of taxpayer risk associated with the accompanying loan provided by the German oversight.
Merkel said Saturday that Obama had played a key role in influencing the outcome of the negotiations. "I spoke on the phone with the American president yesterday," Merkel said at a news bull session Saturday. "That talk clearly influenced the negotiations last night."
But Prime Minister Vladimir Putin's publication at a church Saturday just hours after the sale was announced spoke volumes. Putin showed up driving his antique GAZ-21.
Putin drove the gray, Soviet-era Volga model to a foundation-laying ceremony for a Russian Orthodox church in the village of Usovo in the Moscow region. After the ceremony, Putin gave Russian Orthodox Patriarch Kirill a lift to his Novo-Ogaryovo residence.
A Putin spokesman denied that there was a link between Putin's decision to drive the car and the multibillion-dollar sale, which will give Sberbank a 35 percent stake in Opel and GAZ the status of "industrial partner."
"Vladimir Vladimirovich's driving of the Volga on Saturday had no coupling with the Opel deal," spokesman Dmitry Peskov said Sunday. "He usually drives it when he goes somewhere on his own business."
But Putin has rarely been seen driving the car off Novo-Ogaryovo's grounds, where he gave former U.S. President George W. Bush a ride shortly after acquiring the vehicle in 2005.
In a country where leaders' actions often speak louder than words, some saw Putin's spin on Saturday as something of a victory lap.
"Putin must have driven the GAZ to symbolize Russia's victory," said Dmitry Oreshkin, an autonomous political analyst. "This kind of symbolism was used by the Soviet supervision. It may be cheered by some Russians but frowned upon by foreigners."
The German oversight chose the Russian-Canadian consortium to buy General Motors-controlled Opel early Saturday, ending more than a month of tense negotiations brokered by German Chancellor Angela Merkel and overseen by U.S. President Barack Obama. The deal saves Opel from the planned bankruptcy of GM, which is expected to be filed Monday.
State-owned Sberbank said Saturday that the deal would give Russia's car industry access to new technologies, while Oleg Deripaska's GAZ said it wanted to organize the preparation of Opel cars at its plant in Nizhny Novgorod.
The consortium's biggest adversary was Italy's Fiat, which called the talks "a Brazilian soap opera" and withdrew its bid just hours before the decision was announced.
In a sign of how high the stakes were, Italian Finance Minister Giulio Tremonti declared that Fiat had lost the bid just because it played by market rules, while the German economy minister offered his notice.
As part of the deal, Magna, a car parts producer, will get 20 percent of Opel while GM will keep 35 percent and Opel employees will get 10 percent.
Magna will lend Opel 300 million euros ($424 million) to cover short-term needs on Tuesday, while the Canadian company and Sberbank are to invest 500 million to 700 million euros into Opel later. (For more details of the deal, see the table on p. 2.)
Magna co-chief executive officer Siegfried Wolf said he expected a final contract with GM within four to five weeks, Bloomberg reported.
It was not without hesitation clear how much money Sberbank was ready to invest in Opel. Sberbank chief German Gref said Saturday that he saw the deal as a big opening for Russia's car industry. "This is a great chance for Russia to get one of the most technologically advanced European carmakers at an unprecedented low price," Gref told state-run Vesti video.
"Such an asset would make it possible to restructure the Russian car industry," he said.
Gref gave no further details of the deal. A Sberbank spokeswoman declined further comment on Sunday.
A GAZ spokeswoman said GAZ would need about nine months to retool its plant and plans to produce up to 180,000 Opel cars a year there beginning in 2010.
"We will keep our put together facilities busy thanks to this," said the spokeswoman, who spoke under condition of anonymity in line with company policy. "This will also allow us to rise to a higher technological level in fabrication."
No specific Opel models have been chosen for making, which will be organized on the conveyor where the Volga Siber sedan is now produced, the spokeswoman said. The output of the model was launched in July but suspended several times since because of low demand. "It hasn't been decided whether we will fully stop the fabrication of the Volga Siber when we begin to make Opels or continue to produce it in parallel," the spokeswoman said.
The origination site that GAZ wants to use was constructed by Magna. "It has 85 percent automated equipment that ideally will be completed with Opel's technology," the spokeswoman said.
GAZ owner Deripaska bought a 18 percent stake in Magna for $1.54 billion in May 2007 but was forced to cede it to bankers in September of last year.
Magna said it also wanted to produce Opel cars. "We want to build Opel cars in Canada," Magna chairman Frank Stronach told Toronto-based Globe and Mail. "If we don't change the culture, North America's got no chance to be in the automobile industry, unreservedly no chance." Magna will become Canada's second-largest producer after the merger.
Mikhail Pak, an analyst with Metropol Group, said Opel would be welcome on the Russia market. "In the economy class, it will become a opposition for Ford Focus and Honda Civic," Pak said. "Magna will get a bigger share on the market in Russia by providing Opel service centers with car parts."
Pak said Sberbank's motives for participating in the deal may have been purely financial. "The bank may want to sell its share at a higher price later," Pak said.
Fiat withdrew its bid for Opel on Friday, saying in a statement that it hadn't been provided with enough financial tidings and felt that last-minute additional funding requests could expose it to "unnecessary" risks. It pledged assets but no cash in its bid.
Fiat CEO Sergio Marchionne extended his criticism at a news colloquy Friday. "This process is taking on the air of a Brazilian soap opera," he said in Montreal.
Tremonti, the Italian finance minister, said late Friday that Fiat might have lost its bid because it played by market rules and didn't ask for state support.
"Fiat did not ask the Italian control for anything," Tremonti said on the state-run RAI TV channel. He said Fiat "went to Germany to play according to market rules."
Italian Prime Minister Silvio Berlusconi "could have done a lot using his influence" had Fiat approached him for help, Tremonti said.
Further underlining the drama of the contention, German Economy Minister Karl-Theodor zu Guttenberg offered his forgoing over the government's decision to pick Magna over Fiat, news reports said. Guttenberg did not support the sale to Magna because of taxpayer risk associated with the accompanying loan provided by the German oversight.
Merkel said Saturday that Obama had played a key role in influencing the outcome of the negotiations. "I spoke on the phone with the American president yesterday," Merkel said at a news bull session Saturday. "That talk clearly influenced the negotiations last night."
