Fiat CEO confirms interest in Opel

[SVT666]

Fiat CEO confirms interest in Opel

Fiat has denied its interest in General Motors? Opel brand for the last several weeks, but the Italian automaker has finally fessed up to its interest in GM?s German brand. A German officially first revealed Fiat?s interest in Opel, but Fiat CEO Sergio Marchionne has officially confirmed Fiat is pursuing a majority stake in Opel.

Marchionne revealed to Italy?s La Stampa newspaper that Fiat is currently in talks with General Motors about the acquisition of the Opel brand. Marchionne even went as far as to call Opel the ?perfect partner? for Fiat.

It remains unclear just how big of a stake Fiat is seeking, but GM would likely remain on as a minority stakeholder in Opel. Whatever the case, GM will separate the Opel and Vauxhall brands, keeping Vauxhall brand under the GM umbrella of companies.

GM CEO Fritz Henderson revealed six suitors are currently interested in Opel, but Fiat could be the early frontrunner. GM reportedly prefers the sale of Opel to a single entity, making a joint sale to Canada?s Magna and Russia?s Oleg Deripaska seem less likely.

GM plans to keep Opel talks open until at least the end of the month, with an official announcement likely early next month.

[AltinD]

How on earth would they separate Opel and Vauxall? What will they sell under that brand in UK, the Daewoo products currently sold as Chevrolet?

[ifcar]

How on earth would they separate Opel and Vauxall? What will they sell under that brand in UK, the Daewoo products currently sold as Chevrolet?

GM said it would build its current Hummers, Saturns, and Saabs under contract for any buyer. Maybe the same would come with Opel.

[AltinD]

^^ I am talking about Vauxall.

[ifcar]

^^ I am talking about Vauxall.

Selling Opel wouldn't mean they couldn't keep selling Vauxhalls in their current form.

[the Teuton]

So all people are buying anymore is a name and a distribution channel, right?  I'm not sure I understand this at all.

[Madman]

According to this article from Yahoo, Fiat wants to buy ALL of GM's European operations, including Opel, Vauxhall and maybe even Saab.

http://news.yahoo.com/s/ap/20090504/ap_on_re_us/eu_italy_fiat_gm

Fiat eyes new company with GM Europe, Chrysler

By NICOLE WINFIELD and TOM KRISHER, Associated Press Writers



ROME ? Fiat Group SpA confirmed Sunday that it is in talks to buy most of General Motors Corp.'s European operations, taking another step toward creating a global automotive powerhouse.

Fiat also said it is evaluating the possible spinoff of its auto business to form the core of a new company.

Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands. In addition, Fiat is in the process of acquiring U.S. automaker Chrysler LLC without putting up any cash.

The new auto company, which according to Fiat would have $105 billion in annual revenue, would put the Italian automaker in markets where it has little or no presence, including North America, traditionally the largest market in the world.

"They're going to be a global powerhouse, I guess. Who would have thought?" asked Erich Merkle, an independent auto industry analyst in Grand Rapids, Mich. "They seem to be on a buying binge right now, looking for cheap and distressed assets like Chrysler and Opel."

The Chrysler deal, which must still be approved by a U.S. bankruptcy court, would be in exchange for giving Chrysler access to Fiat's small-car and engine technology. Chrysler cars and trucks also would be sold by Fiat through its global distribution network.

The deals would make Fiat a big global player, but that might not be the best thing for the Italian automaker, which might be overreaching with the acquisitions, said Merkle.

"This is a lot to take on, quite honestly," Merkle said. "When you start looking at Chrysler, it'll make them a very large automaker, but we've seen that large isn't necessarily indicative of success."

It will take years, Merkle said, for Fiat to gain any synergies by globalizing design, engineering and manufacturing operations with Chrysler and the GM units.

The Fiat statement was issued on the eve of a meeting in Berlin between Fiat CEO Sergio Marchionne and the German economy and foreign ministers to discuss Fiat's offer for GM's German unit, Opel.

GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab. Saab may not be included in the deal, however. The company is being reorganized under Swedish law and is likely to be separated from the rest of GM's European operations.

GM Europe spokesman Frank Klaas said the company has several possible investors, which he wouldn't identify, but said, "we are in very good negotiations with them."

GM also makes and sells small Chevrolet-badged cars in Europe that are designed in South Korea by the company's Daewoo unit, and it's unlikely to sell that because that would be GM's only remaining foothold in Europe, Merkle said.

General Motors has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has received $15.4 billion in aid from the U.S. government to avert collapse.

Opel has said it needs $4.3 billion to get through the economic crisis. The German government has said it doesn't foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees.

Fiat said that over the next few weeks, Marchionne will be looking "to assess the viability of a merger of the activities of Fiat Group Automobiles (including the interest in Chrysler) and General Motors Europe into a new company."

"As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe."

In an interview Sunday with Corriere della Sera, Fiat Chairman Luca Cordero di Montezemolo called GM's Opel an "ideal partner" and a possible takeover by Fiat an "extraordinary opportunity."

Fiat is not the only suitor for Opel, however. Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg with what the minister called a "rough concept for a commitment with Opel."

Guttenberg has said the German government would wait to determine its role in any full or partial Opel sale until after the U.S. government had weighed in.

Fiat, meanwhile, has pressed ahead with a takeover of Chrysler. Chrysler is seeking to sell substantially all of its assets to Fiat, but must gain approval from a New York bankruptcy court.

In addition to Fiat Group Automobiles, the Fiat Group also includes its agricultural vehicles branch CNH and its Iveco trucking unit, as well as a media arm.

___

AP Auto Writer Tom Krisher in Detroit and Associated Press reporter Colleen Barry contributed to this report.




Cheers,
Madman of the People

[S204STi]

Fiat stands to become one of the top automakers in the world (in terms of size) with this, no?

[Madman]

More info here:

Fiat plans European car supergroup.

http://www.ft.com/cms/s/0/a4a4767a-380d-11de-9211-00144feabdc0.html?nclick_check=1


Cheers,
Madman of the People

[SVT666]

I hope they succeed, because it would sure suck to see all those companies go under.

[Galaxy]

Fiat buying Chrysler makes perfect sense to me. However Fiat and Opel compete in every segment. At least Opel got some breathing room do to the Insignia selling like hot cakes.