Strategic dealmakers and private equity investors work together only once in a while. Could they team up more often? Whenever we've heard this question discussed at conferences, the consensus seems to be that such partnerships are interesting in theory but tough to pull off in practice.
And that's even without the involvement of the German government, not known to harbor warm feelings for the buyout crowd.
So with final bids due Monday in the auction of the Adam Opel GmbH unit of General Motors Co. -- details
here for The Deal Pipeline subscribers -- the financial buyers, RHJ International SA, have a hill to climb if they're to beat out the preferred bidder, Canadian parts maker Magna International Inc. (NYSE:MGA) and its Russian partners Sberbank and OAO Gaz.
This is despite the fact that, according to reports, some GM execs like the idea of selling a majority stake in their European unit while retaining an option to buy it back later when the company is stronger. And it does sound like a win-win sort of deal, doesn't it?
Except that to German economics minister Karl-Theodor zu Guttenberg, whose government will provide financial support for either transaction, it sounds more like a
win-win-lose sort of deal. "This is incompatible with our views and cannot happen," he told the Sunday Frankfurter Allgemeine, according to Automotive News Europe.
But if nothing else, the bid by RHJ (and another by Beijing Automotive Industry Holding Corp., which now seems to be in third place) may be
improving the leverage GM and Berlin have with Magna. In a
final bid being readied for submission Monday, Bloomberg reports that Magna is raising the stake it proposes to take in Opel, to 27.5%, while Sberbank will lower its proposed holding to the same proportion. GM would hold 35%, and Opel's workers the balance. That may help address GM's worries over protecting its intellectual property in Russia, and other Russian-market elements of the deal. -
Kenneth Klee
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Juergen Lasowski
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