Car maker approaches Magna about Opel | Shanghai Daily

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September 19, 2009

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Car maker approaches Magna about Opel

CHINA'S Geely Group has approached Magna International about a potential production partnership on Opel, a source familiar with the matter said.

Talks between the parent company of Geely Automobile Holdings and the Canadian auto parts supplier included the possibility of Geely taking a stake in car maker Opel, but Magna is refraining from any such partnership for now, the unnamed source said.

General Motors agreed earlier this month to sell a 55 percent stake in Opel to a group led by Magna, a deal that GM Chief Executive Fritz Henderson expects to be finalized next month.

GM will keep 35 percent of Opel, with Magna and Russian state bank Sberbank each taking 27.5 percent.

Lawrence Ang, executive director at Geely Automobile, said the listed firm had never approached Magna on Opel. Geely had also repeatedly denied media reports that said it was in talks with Ford Motor Co to buy Volvo, but earlier this month said its parent is considering a bid for the Swedish brand.

Separately, Geely's Hong Kong-traded shares were suspended on Wednesday pending an announcement on a convertible bond issue, which Ang said was not related to Volvo. The China Business News said Geely planned to issue convertible bonds and warrants worth US$250 million.

Geely Automobile has growing ambitions and has said its parent may also team up with a local government-backed investor to jointly bid for Volvo, which reports have valued at US$2 billion.

But analysts said Chinese auto makers will struggle to manage overseas auto assets given their limited international exposure.




 

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