BEIJING – China’s Beijing Automotive Industry (Holding) Corp. (BAIC) said on July 24 that, due to intellectual property issues, it has failed in the acquisition competition for GM’s Opel unit.
“In negotiations over intellectual property, we have been in constant communications with General Motors,” the company said in a statement. “Regrettably, both parties failed to reach agreement on the issue.”
In a statement released on July 23 by GM Europe, the automaker’s chief negotiator John Smith said that the company has “agreed to continue detailed talks with Magna and RHJ to secure Opel’s future.” This implied that BAIC has failed to make headway in the talks.
GM has not notified BAIC on detailed failure reasons of their negotiations.
GM now will focus its talks with other two bidders, a consortium led by Magna International Inc. and Belgian investment group RHJ International. The U.S. automaker said it aims to finalize a sale by the end of the third quarter.
Earlier, German government spokesman Ulrich Wilhelm told a news conference that Canada’s Magna was still Germany’s preferred bidder for Opel.
The German government has limited confidence in BAIC’s global management skills, and GM is not willing to sell the Opel brand to a Chinese automaker to rival its current operations in China, said industry analysts.
GM announced in July that for its Opel unit it has received three bids. Among them BAIC, which made its offer for Opel on May 21, one day later than the bidder deadline, provided the most “favorable” terms. According to earlier reports, the company would invest €660 million in equity for a 51 percent stake in Opel and reserve the highest 49 percent stake for GM. Its plan envisions preserving all four Opel plants in Germany for at least two years and foresees no job cuts in the country. In addition, the plan calls for less than €2.64 billion in state aid, which is the smallest among the three bids.
The Beijing municipal government will fully support BAIC’s bid for Ford Motor’s Volvo car unit if the Chinese automaker fails in its current quest for GM’s Opel, sources told Reuters on July 22.
According to a report on 21st Century Business Herald, the Chinese carmaker is also interested in acquiring Saab, another brand GM is going to sell. The report said BAIC’s chairman Xu Heyi has visited Saab’s plant in Sweden and signed a confidential deal with the automaker.
BAIC was the No. 4 automaker in China in 2008. Its commercial vehicle unit Beiqi-Foton is now the world’s second largest commercial vehicle manufacturer. However, the company now has no own-brand car unit yet. BAIC was said to be acquiring or allying with different carmakers, both domestic and overseas, to expand into the car segment.
BAIC sold 478,752 vehicles in the first five months of this year, up 25.29 percent year-on-year, according to CBU-Autostats.