Magna set to buy GM’s Opel

A group led by Canadian auto parts maker Magna International Inc. has arranged to take control of the European affiliate of General Motors Corp.

Aurora, Ontario-based Magna, backed by Russia’s Sberbank, won acceptance of a preliminary deal that would give it a 20 per cent stake in Rüsselsheim, Germany-based Adam Opel GmbH.

Magna, the auto parts maker founded by Frank Stronach in a Toronto garage in 1957, was picked by the German government to buy Opel in a rescue bid. Two German states with major Opel factories also gave their support for the deal that would save the German automaker from insolvency.

Sberbank and GM would initially own 35 per cent apiece, with OAO Gaz, a Russian carmaker controlled by billionaire Oleg Deripaska, listed as an industrial partner.

According to the German government, it will give Opel interim loans worth about $2.3-billion while Magna and GM work out an agreement in full, a process that could take longer than a month.

If the deal is finalized, it would mark the first time in a century that a Canadian has held an significant ownership position in a major auto manufacturer.

Opel will be put in a special trust to shield it from GM’s June 1 bankruptcy filing in the United States. Magna also intends to take over GM’s British Vauxhall division and its Chevrolet business in Russia.

According to Magna’s production figures, GM is the company’s largest parts customer, representing 21 per cent of its 2008 global sales of US$23.7-billion.