Berlin, Germany – Canadian auto supplier Magna International will take over General Motors’ Opel division, following Germany’s agreement to the deal. The German government is expected to provide €1.5 billion in immediate loans, while Magna has said it will invest more than €500 million.
Magna is supported in the venture by Russian bank Sberbank and by the truck firm Gaz. The deal will protect Opel if General Motors files for bankruptcy protection.
Opel employs more than 25,000 people in Germany, and has workers in Spain, Belgium, Poland and the U.K., where Opel vehicles are sold as Vauxhall. Magna said that it plans to cut 2,500 jobs in Germany. Fiat, which was also reported as bidding for Opel, had said it would cut 10,000 jobs.
Previous reports on the Magna talks suggested that General Motors would retain a 35 per cent stake in Opel, while 10 per cent would be owned by Opel’s employees.