Opel: A corporate snapshot

What is Opel?

Automaker Opel is a subsidiary of General Motors and is GM's largest European brand. With headquarters in Russelsheim, Germany, Opel operates three plants in that country, as well as facilities in Belgium, Spain, Poland and Hungary. Opel cars are also made at a United Kingdom plant run by Vauxhall, anotherGM subsidiary.

What are its origins?

The company was founded by Adam Opel in 1863 and began by producing household goods, sewing machines and bicycles. Opel manufactured its first automobile in 1899 and by 1913 had become Germany's largest automaker.

In 1929, General Motors purchased an 80 per cent stake in Opel and bought up the remaining 20 per cent two years later. By 1937, Opel was Europe's largest automaker. In 1940, with Germany at war, the Nazi regime seized control of Opel's factories and halted all civilian production. GM wrote off Opel as a complete loss in 1942.

Once the war ended, GM re-established its control over the company in 1948.

What are Opel's products?

Opel makes 15 different models of cars, vans and trucks. Many cars sold worldwide by GM are Opel designs, including Corsa, Astra, Vectra and Omega.

Opel models are also sold under other GM brand names, including Vauxhall in the U.K., Holden in Australia and New Zealand, Saturn and Pontiac in North America and Chevrolet in Latin America. Other models sold in the U.S., but slightly modified, include the Saturn L-Series, Chevrolet Malibu and Cobalt.

Why is Opel for sale?

General Motors, which entered bankruptcy protection with the help of billions in U.S. and Canadian government loans, has been trying to find buyers for its non-core and unprofitable assets.

Opelhas said it iscurrently unprofitable and says it needs $4.3 billion US in aid from European governmentsto avoid job cuts and plant closures.As such,65 per centof Opel's stock was transferred into a joint trust controlled by representatives of GM and the German government.

Whohave beenthe potential buyers?

In November 2008, Germany's Solarworld announced a bid to buy Opel for about $1.3 billion US. GM expressed no interest in the deal and Solarworld said in March 2009 it was no longer willing to buy the company.

Italian automaker Fiat SpA also entered discussions, but pulled out of the running in May.

Canadian-based Magna International, which manufactures auto parts, introduced a plan in the spring of 2009 to buy a 20-per-cent stake in Opel. Sberbank, a Russian bank, would take 35 per cent. General Motors and Opel employees would also retain ownership positions.

RHJ International, a Brussels-based investment house, later introduced a competing bid. So did Chinese automaker BAIC, but it did not make the final cut.

So when binding offers were presented in July, GM management was left to choose between two: the Magna and RHJ bids.

The German government indicated its strong preference forthe Magna-ledbid, with Chancellor Angela Merkel going as far to sayshe was willing to personally intervene on its behalf. But the decision,the government said,ultimately rested with GM.

What was the successful deal?

In September, the joint trust responsible for the majority of Opel stock added its backing to the Magna consortium.

GM announced its pick days later:the Magna/Sberbank offer. Magna had increased its stake it and Sberbank would receive 55 per cent ownership. GM would hold onto a 35 per cent stake and Opel workers would get 10 per cent.

Despite the stamp of approval, the pact is not yetcompletely finalized. Written support from the automaker's labour unions and a definitive financing agreement with the German government are still necessary, GM president Fritz Henderson said on Sept. 10.