11 Sep 2009

GM sale to Magna confirmed

7:51 am on 11 September 2009

General Motors has chosen Canadian car parts maker Magna as the buyer of its Opel and Vauxhall units.

The sale ends months of uncertainty over the European unit's fate.

In a statement on Thursday, the United States car maker said it expects a definitive agreement to be ready within a few weeks and predicted the deal could close in a few months.

German Chancellor Angela Merkel said the decision offers Opel a "new beginning".

Magna, which is backed by Russia's Sberbank, has said that it will keep all four German plants open.

GM will sell a 55% stake in the new Opel to Magna and Sberbank. Employees will hold a 10% stake and GM will keep the rest.

The Opel Trust, which controlled that 65% of GM's European operations, approved the deal.

It said it strongly believed it was "in the best interests of Opel and Vauxhall and their employees".

The German government has already lent €1.5 billion to Opel and will now put up an additional €3 billion in loan guarantees for Magna.