More details have been reported about Beijing Automotive Industry Holding Corp.'s
eleventh-hour bid for General Motors Corp.'s Adam Opel GmbH European unit. In its approach, the Chinese automaker said it was ready to sink $2 billion into Opel's first plant in China, which would open in 2012 and produce cars tailored to the local market, according to Tuesday reports by the Financial Times and Reuters.
GM's talks to sell Opel to Canadian parts maker Magna International Inc. (NYSE:MGA) and Russia's Sberbank are well advanced but the company says it's still open to other approaches. (Brussels financial investor RHJ International SA has also submitted a nonbinding offer.) Recent reports indicate that either GM or Washington is worried the new owners could hand Opel technology to OAO Gaz, a Russian carmaker affiliated with the Magna offer. Sberbank didn't help any by confessing it doesn't see Opel as a long-term investment.
But BAIC's offer, which would leave GM with a 49% stake, would have GM competing with Opel in the market that is its best growth story. According to the Reuters report, BAIC -- at this point still a second-tier player in China --
wants to build a network of 400 dealers in China and sell nearly half a million Opels there by 2015.
The Wall Street Journal on Tuesday quoted a person "close to GM" calling BAIC a "formidable bidder," and it may well be. But what else would you say if you were running a public auction? -
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