Beijing Auto offers $923 million for Opel, but race could already be over

Three companies have submitted bids for Opel so far, but another, China's Beijing Automotive Industry Corporation (BAIC), has now joined the fray with an offer of more than $923 million. However, Opel front-runner Magna International's consortium partner Sberbank believes the bidding war is already over and that the Canadian automotive parts supplier is in the strongest position to take over GM’s European division.

BAIC Chairman Xu Heyi has written to German politicians saying his company would be an “excellent home” for Opel, according to the Frankfurter Allegemeine Zeitung's Sunday edition. The Chinese company would turn Opel into a global brand, Xu said in the letter, according to the source.

BAIC is looking to acquire a 51% stake in Opel and would still need almost $3 billion in aid from the German government. GM would retain the other 49%. According to a preview report, BAIC executives visited Opel’s Ruesselsheim plant in Germany last week and are currently working on a new bid to be submitted by July 15. BAIC's interest in Opel is primarily that of technology, as acquiring the struggling automaker and bringing that know-how and production capability back to China would give it a competitive edge back in its home market.

The latest bid now opens up a four-way BAIC-Fiat-Magna-Ripplewood Holding bid war. Fiat and Magna's plans for Opel have been widely speculated on, though Ripplewood Holding's plans are still in the dark. Adding a dash of reality to the situation, few believe that BAIC has the cash necessary to fund the purchase of Opel, and with its bid arriving late, BAIC's acquisition of Opel appears to be an unlikely outcome, leaving Opel safe with its three current bidders.