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. Last Updated: 07/27/2016

Magna, Sberbank Finalize Opel Bid

Magna and Sberbank revised draft agreements on purchasing control of Opel from General Motors on Thursday, clarifying outstanding issues with the U.S. automaker and taking the process one step closer to a final agreement.

Siegfried Wolf, Magna Europe’s co-chief executive, was confident Thursday. “We have agreement on all points between our partners Sberbank, Magna and General Motors,” he told Bloomberg, calling the agreement “a contract that can be signed.”

General Motors last week publicly expressed hesitation regarding Magna’s bid — long considered the front-runner — because it was not excited about having a third corporate party in the talks, much less a Russian state bank.

The Detroit-based company had 30 outstanding issues with Magna’s bid early last week, GM Group vice president John Smith — the company’s chief negotiator in the Opel sale — wrote on his blog Aug. 6. “One key point for GM is intellectual property, and this transaction should not become a pipeline, shipping valuable intellectual property to destinations unknown,” he wrote.

The Russian government has vocally backed the bid as a way to revitalize the country’s struggling domestic automakers with an influx of knowledge and technology.

In a statement Thursday, however, GM said “progress has been made in clarifying issues from the best and final offers received two weeks ago” and the company said it received new documents from Canada-based Magna.

GM has also requested that a task force formed by the German government outline the financial package that is being prepared by Berlin and other European governments, the statement said. When the outline is available, the GM board of directors will review options for Opel and make its recommendation to the Opel trust board.

The U.S. automaker, which recently left bankruptcy, is selling off 55 percent of its loss-making European unit as part of its restructuring.

The five-person Opel trust board has two General Motors representatives, a representative for the German federal government, a representative for the four German states with Opel plants, and a nonvoting, independent member.

There are two bidders in the running for Opel, after China’s BAIC withdrew its offer last month. GM’s Smith has previously called a proposal from Belgian private equity firm RHJ International “the simpler of the two,” although he also said there was little difference between that bid and the Magna consortium’s in terms of their “industrial concept.”

A GM Europe spokeswoman declined to comment on how Magna and Sberbank changed their position or any deadline for the German government regarding the financing outline.

RHJI did not return a call for comment.

The German government and the country’s labor unions have long been vocal in their support of Magna’s proposal. The head of the influential IG Metall union, whose representatives are part of the Opel supervisory board, told Prime Minister Vladimir Putin in Moscow last month that the union considered the Magna-led bid the best option.

Berlin promised a 1.5 billion euro ($2.1 billion) bridge loan and another 3 billion euros in guarantees to help during the handover of Opel, which has four plants in Germany. Although RHJI requested a smaller government funding package of 3.8 billion euros, it is not clear whether the government would make the money available to the equity firm.

Magna’s offer would evenly split the 55 percent stake between Magna and Sberbank, while Opel workers would keep their 10 percent and GM would retain 35 percent. The partners are offering to invest 500 million euros ($715 million) into Opel.

Oleg Deripaska’s automaker GAZ would be brought in as an industrial partner.

A GAZ representative declined to comment on the bid’s progress Thursday, referring questions to Sberbank.

Sberbank did not respond to a request for comment.

German Chancellor Angela Merkel is scheduled to visit Sochi on Friday to meet with President Dmitry Medvedev, and the subject of Opel is expected to come up.

Alex Anishyuk contributed to this report.