A top German government official warned bidders for Opel on Friday to develop a business plan that can meet European Union guidelines on state subsidies because Berlin expects an in-depth anti-trust probe of any deal.
Yes, clearly, Deputy Economics Minister Jochen Homann told reporters when asked whether he counted on Brussels examining any deal under a lengthier, so-called 'phase II' investigation.
He declined to specify what issues might concern EU competition authorities since the German government is still awaiting a business plan for a takeover of General Motors' Opel, which he hoped to get by the end of July.
Canadian automotive supplier Magna, backed by Russian partners, is the frontrunner to buy Opel. Sources told Reuters on Thursday that Magna's board of directors wants to approve a business plan for Opel on July 7.
PriceWaterhouse Coopers would then evaluate this business plan for Berlin, which will have to offer more state aid after already extending Opel a six-month 1.5 billion euro ($2.1 billion) bridge loan that matures on Nov. 30.
Every day that there is no restructuring costs money, every month that goes by is a lost month, said Homann, the head of the government's Opel task force.
The British government said it was also prepared to support the deal if the terms were right.
Speaking at a Handelsblatt auto industry conference, Homann expressed scepticism over Magna's concept for Opel and said that vested interests praising the auto parts supplier's offer as the best left the German government open to extortion.
We will see whether Magna's concept is successful. It is based on theories over which one can heartily discuss...There are justifiable question marks, he explained.
He expressed doubts as to the wisdom of basing a business plan on the boom-and-bust Russian car market and questioned whether Magna could lure other carmakers to utilise Opel's unused production capacity.
BRUSSELS SEES OVERCAPACITIES
Homann, who reports to Minister Karl-Theodor zu Guttenberg, stated no preference for any of the three current bidders -- Magna, RHJ International and Beijing Automotive (BAIC).
Homann warned that whoever wants to acquire Opel would have to prepare for a tough EU cartel probe.
The negotiating parties would be well advised to develop a concept that is economically sustainable, fulfils our laws governing loan guarantees and is compliant with EU subsidy rules, he told the conference.
Homann pointed to the chronic structural overcapacities that the EU is concerned about and cautioned that the European Commission has stated a bailout could not distort competition.
Sources familiar with the Opel negotiations have voiced anxiety that Paris might try to install French Economy Minister Christine Lagarde as the next EU Competition Commissioner under a likely second term for President Jose Manuel Barroso.
They fear she might be more critical in part since Opel does not have any major manufacturing operations in France, home to key competitors PSA Peugeot Citroen and Renault, which counts the French state as a large shareholder.
(Editing by Michael Shields)