Magna to buy Vauxhall

* Deal agreed in principal * Needs German government approval * Uncertainty over job cuts...

Magna to buy Vauxhall
Author Avatar
David Motton
29 May 2009 16:45

Canadian car parts group Magna is to buy Vauxhall and Opel's parent company, GM Europe.

The sale has been agreed in principle between Magna and General Motors, but still requires the approval of German Chancellor, Angela Merkel, since Magna is relying on an injection of cash from the German government.

Senior politicians will meet in Berlin this evening to decide whether to approve the deal. It seems likely that the sale will receive the backing of the German state, since Magna has indicated it will cut fewer jobs than rival bidder Fiat.

Magna has warned that 2500 jobs will go across Germany. Fiat had intended to make 10,000 workers redundant.

Magna's plans for Vauxhalls UK plants are less clear, although job cuts seem inevitable.

The deal is unlikely to stop General Motors declaring itself bankrupt in the US.