China's state-run carmaker Beijing Automotive Industry Holding Co (BAIC) is preparing to make an offer for General Motors' Opel unit in the coming days, a source told Reuters, but the Russian partner of bid frontrunner Magna said the race was all but over.
BAIC, a local partner of German auto manufacturer Daimler assembling Mercedes saloons in China, is working out a bid to be submitted before a mid-July deadline, a source familiar with the matter said on Thursday.
General Motors has piled extra pressure on Austrian-Canadian parts maker Magna by talking up rival offers from BAIC and Belgian investment firm RHJ International in the run-up to July 15, when Magna wants to be able to sign a deal.
Majority control over GM's Opel unit, which also includes plants in Britain and Spain, is being sold as a precondition to state aid for the German carmaker now that the bankrupt U.S. carmaker can no longer afford to finance its foreign subsidiary.
Analysts say BAIC, which is being advised by Deutsche Bank and PriceWaterhouse Coopers, is keen to expand out of its domestic market and build Opel into a global brand.
But it has so far provided scant details of its intentions and its initial document filed to investment bankers running the deal was just two pages long.
One source close to BAIC said it entered the process comparatively late because GM was reluctant to involve it in the process at all.
Sources at GM have said they want to avoid encouraging competition in China from its erstwhile Opel brand.
BAIC declined to comment.
In Moscow, Sberbank , which is partnering Magna along with Russian carmaker Gaz , said that BAIC, RHJ and a third rival, Fiat , were all effectively out of the race.
I do not see any serious competition. The choice has been made and the question now is of how to structure the deal, Chief Executive German Gref told reporters.
Klaus Franz, head of the Opel works council, told Germany's Bild newspaper that GM was playing a high-stakes game to improve the terms of the sale, adding that he knew of no new offer.
That followed comments from Franz in a Wall Street Journal report, in which he expressed strong reservations about any sale to BAIC.
They only want technology and have no experience in global auto production, the paper reported Franz as saying.
(Reporting by Christiaan Hetzner, Dmitry Sergeyev, Anne Jolis, Fang Yan and Angelika Gruber; editing by David Cowell)