Magna confirms bid for Opel

Canadian supplier Magna International Inc. said Friday that it had teamed up with Russian financial institution Sberbank Rossii to bid for General Motors Corp.'s ailing German carmaker Adam Opel GmbH.

"The offer contemplates a total investment by Magna and Sberbank of Euro 700 million (about $900 million), a portion of which would be guaranteed by the German government," Magna said in a statement.

GM and the German government are reviewing the bids submitted this week for Opel, including offers from Italy's Fiat SpA and New York-based Ripplewood Holdings LLC.

Sources familiar with the negotiations say GM would prefer, at this stage, to pursue a deal with Magna. Ripplewood is its second choice, they say, and Fiat its third.

The Associated Press reported earlier that the governor of Hesse, the German state where Opel is based, indicated he also favored Magna's bid.

"The offer from the Magna group is certainly the one that is closest to the hopes and wishes of, I think, many in German politics but also among employees," Hesse state governor Roland Koch said on Deutschlandfunk radio.

He added that "there is a very interesting offer from a financial investor with the Ripplewood group and certainly some ... are a little disappointed that Fiat's offer is a very long way from what one perhaps hoped for in some places."

Koch, a deputy leader of Chancellor Angela Merkel's Christian Democrats, did not elaborate in detail on the strengths and weaknesses of the various bids.

However, he said Magna is "counting very strongly on being able to win new markets and new customers with new ideas, while other concepts rather assume rationalization."

Ruesselsheim-based Opel employs some 25,000 people in Germany, nearly half GM Europe's total work force.

The Fiat bid in particular has raised worries among some politicians and union officials of potentially large job losses and plant closures, although CEO Sergio Marchionne has sought to allay those fears.

On Friday, Fiat said its proposal would entail fewer than 10,000 job cuts across Europe -- far below some reports citing a figure of 18,000 for Germany alone.

While state officials have expressed opinions on the various bidders, the German federal government has remained neutral.

"The German government has three concepts; we are evaluating these concepts internally, but we will not participate now in public speculation and evaluations," Economy Ministry spokesman Steffen Moritz said.

German officials have said it is up to GM to choose Opel's investor, while Berlin will decide whether and how to lend state support to the selected bidder.

Government spokesman Thomas Steg said Friday that Germany wants a potential new owner to produce "a sustainable concept for the company ... to secure as many jobs as possible and preferably secure the German facilities."

ctierney@detnews.com">ctierney@detnews.com (313) 222-1463 The Associated Press contributed.