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Fiat may buy Opel from GM, spin off auto unit
(China Daily)
Updated: 2009-05-05 07:52
 Fiat SpA, the Italian carmaker taking a stake in Chrysler LLC, may spin off its automobile division following a purchase of General Motors Corp's European unit. CEO Sergio Marchionne will seek over the next few weeks to assess the viability of a combination and a new company, the board of the Turin, Italy-based carmaker said on Sunday. GM says it's open to offers for the Germany-based Opel division, which is running out of cash and seeking 3.3 billion euros ($4.4 billion) in German aid. Another potential investor is Magna International Inc, North America's largest auto-parts maker. A spinoff of Fiat Automobile, which accounted for 45 percent of Fiat's 2008 sales, would leave Italy's largest manufacturer with assets such as the CNH Global NV agricultural and construction-equipment unit, and Iveco trucks. "Instead of defending its niche market in Italy, Fiat decided to be a predator worldwide," said Luca Peviani, managing director at P&G Sgr in Rome. Fiat already plans to take control of Chrysler, based in Auburn Hills, Michigan, in a deal announced last week. Marchionne said last week he regards Opel as an "ideal partner" and would concentrate on buying that part of Detroit- based General Motors after the unveiling of the Chrysler agreement. A combined company would have 80 billion euros in annual sales, the board said. "The group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe," it said in the statement. Marchionne was scheduled to present Fiat's plan for Opel to German Economy Minister Karl-Theodor zu Guttenberg and Foreign Minister Frank-Walter Steinmeier in Berlin today. Speaking to reporters before the meetings, Guttenberg said the discussions will be "very open". Fiat is also looking at GM's operations in emerging markets, people familiar with the matter said. GM is negotiating with automotive companies and investors interested in Opel and is separately talking to Fiat about tie-ups involving GM operations such as those in Latin America, they said. Turin-based Fiat sold 2.15 million autos last year and adding Auburn Hills, Michigan-based Chrysler will lift the total toward 4 million. While that's still short of the number Marchionne says will guarantee long-term viability, GM last year achieved 1.5 million sales at Opel, 1.3 million in Latin America and 1.5 million in the Asia-Pacific region. "If Marchionne gets GM's organization in China, he potentially has the volume he reckons he needs," said Peter Schmidt, analyst at England's Automotive Data. "Or GM Russia, and use that as a springboard to neighboring countries." Magna and carmaker OAO GAZ, owned by Russian billionaire Oleg Deripaska, are interested in taking over the bulk of GM's European unit, the people said. GM is reviewing bids for Opel, the German unit's managing director Hans Demant told reporters in Germany. Other interested parties include sovereign wealth funds Abu Dhabi Investment Council and the Government of Singapore Investment Corp, and three private-equity funds, according to one of the people familiar with negotiations. As part of the deal for Chrysler to seek court protection, the No. 3 US automaker will get as much as $3.5 billion in operating loans from the government. Fiat has agreed to make engines and cars in the US. Bloomberg News (China Daily 05/05/2009 page17) |
