Is the GM Europe takeover on the verge of collapse?
As we covered earlier today, the European commission has decided to investigate the proposed takeover of GM Europe by Canadian outfit Magda and a €4.5 billion loan from the German authorities. There are concerns in some quarters that the German authorities have used the carrot of a €4.5 billion loan to secure jobs for the German workforce, possibly resulting in further job cuts across Europe, including the UK. Whether the European Union will be brave enough to step in and potentially block any takeover of GM Europe, a move that would cost thousands of jobs across Europe, is debatable.
There has been concern in some quarters regarding the Canadian group's connections with Russian financiers and how this will impact on the future of GM Europe. However, so far the Russian financiers have remained very much in the background with Magna taking on the role of negotiator with various European authorities.
The UK government is also in a very tricky situation because Lord Mandelson has effectively questioned the German loan to Magna, even though the German authorities have now asked other EU allies to contribute. There is no doubt that the European authorities are taking a more hands-on approach to European takeovers and regulation, effectively trying to outmanoeuvre associations such as London Stock Exchange on various issues.
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