mikeyb
05-30-2009, 09:07 AM
Rumors of a Magna-Saturn-Opel alliance will get just a little bit stronger today as reports from Germany indicate Opel and Magna have reached a tentative deal. Securing $2.1 billion in financing with the help of parent company GM, the bargain promises to keep Opel afloat for the near term.
Another upside to the deal is that it could serve to protect Opel from General Motors' creditors in the U.S., as the American giant is expected to file for Chapter 11 bankruptcy on Monday. Magna reportedly won preference over Fiat for its willingness to muster between €500-700 million ($705-990 million) in emergency bridge financing until the German government can step in with its $2.1 billion in promised financing.
"A framework agreement has been reached. The goal is to work out as many of the details as possible before the meeting with [German Chancellor Angela] Merkel in order to sign a memorandum of understanding today," the source told Reuters. That meeting is currently underway according to the latest BBC report.
The leak puts Fiat's decision to skip talks with Opel today in context. While Fiat had previously sought a deal with Opel, it said today that it would be exposed to too much risk if it had to go forward with the deal.
Despite that, Fiat CEO Sergio Marchionne says he's still interested in Opel, so there may yet be a Fiat-Magna-Opel alliance at some point. How that might tie into Fiat's acquisition of Chrysler and the still-in-limbo Saturn brand is anybody's guess.
Another upside to the deal is that it could serve to protect Opel from General Motors' creditors in the U.S., as the American giant is expected to file for Chapter 11 bankruptcy on Monday. Magna reportedly won preference over Fiat for its willingness to muster between €500-700 million ($705-990 million) in emergency bridge financing until the German government can step in with its $2.1 billion in promised financing.
"A framework agreement has been reached. The goal is to work out as many of the details as possible before the meeting with [German Chancellor Angela] Merkel in order to sign a memorandum of understanding today," the source told Reuters. That meeting is currently underway according to the latest BBC report.
The leak puts Fiat's decision to skip talks with Opel today in context. While Fiat had previously sought a deal with Opel, it said today that it would be exposed to too much risk if it had to go forward with the deal.
Despite that, Fiat CEO Sergio Marchionne says he's still interested in Opel, so there may yet be a Fiat-Magna-Opel alliance at some point. How that might tie into Fiat's acquisition of Chrysler and the still-in-limbo Saturn brand is anybody's guess.