German solar power group SolarWorld took the struggling auto sector by surprise on Wednesday with a takeover bid for troubled General Motor’s German car unit Opel.
“I could not be more serious,” SolarWorld boss Frank Asbeck said. “We would not make this offer otherwise.”
SolarWorld said it would pay 1 billion euros (US$1.26 billion) for Opel and create the “first green European automotive group” in a move that had analysts reaching for calculators and scratching their heads.
PHOTO: EPA
A statement said SolarWorld would offer 250 million euros in cash and 750 million euros in bank credit facilities for Opel’s four auto factories and a key research center in Ruesselsheim, western Germany.
Its goal was “to produce a new generation of vehicles with energy-efficient, low-emission [engines] in the future,” in addition to the current models.
It attached several conditions to the deal however, including a complete split of Opel from GM, which is threatened with bankruptcy, and compensation payments of 40,000 euros per Opel worker, which would approximately equal the 1 billion euro purchase price.
SolarWorld also sought a liquidity guarantee for Opel from the German government.
Opel was not in a position to immediately give a reaction, a spokeswoman said, and specialists did not quite know what to make of the bid.
“This is nonsense,” IHS Global Insight analyst Christophe Stuermer said.
Auto expert Stefan Bratzel said: “At first sight it is a marketing gag. At second, the feasability of such an operation is zero.”
Opel is trying to get through a rough patch and was obliged to ask German authorities for loan guarantees owing to slumping markets and problems at its parent company, which is threatened with bankruptcy.
But it is still much bigger than SolarWorld, which has never made anything other than solar power equipment, or ever invested in the auto sector.
The company had sales last year of 689 million euros and a staff of 2,500.
Opel’s accounts are fully integrated into GM’s and therefore not easily comparable but the group employs 26,000 people in Germany.
“Do you know the story of David and Goliath,” Asbeck responded. “Size has never been a decisive factor.”
Stuermer argued that “Adam Opel Germany has total assets of around 8 billion euros — SolarWorld’s offer is ridiculous.”
Investors appeared to feel the same way and SolarWorld’s shares plummeted 13.98 percent to 13.85 euros in late trading on the Frankfurt stock exchange, while the TecDax index on which it is listed was off 4.52 percent overall.
Several experts pointed out that GM has never said it wants to sell Opel, though many in Germany see that as the best option for the local car maker.
“SolarWorld’s offer is only possible within the framework of a break-up,” Bratzel said. “And that would only happen if the US government said: ‘Sorry GM, there is nothing we can do for you!’ Nothing indicates that [that] is what will happen.”
“It does not go well when you leap into the auto industry as a stranger,” said Stuermer, who cited the case of Swatch inventor Nicolas Hayek who launched the Smart car more than a decade ago.
“In the long run it does not make sense,” said Albrecht Denninghoff, an analyst at BHF-Bank.
He nonetheless saw in the bid a short-term solution for Opel’s cash-flow problems but added: “SolarWorld would have to link up with a European or global manufacturer.”
Meanwhile, the state parliament in western Hesse, where Ruesselsheim is located, approved on Wednesday 500 million euros in loan guarantees for Opel if GM goes bankrupt.
KONG-REY: A woman was killed in a vehicle hit by a tree, while 205 people were injured as the storm moved across the nation and entered the Taiwan Strait Typhoon Kong-rey slammed into Taiwan yesterday as one of the biggest storms to hit the nation in decades, whipping up 10m waves, triggering floods and claiming at least one life. Kong-rey made landfall in Taitung County’s Chenggong Township (成功) at 1:40pm, the Central Weather Administration (CWA) said. The typhoon — the first in Taiwan’s history to make landfall after mid-October — was moving north-northwest at 21kph when it hit land, CWA data showed. The fast-moving storm was packing maximum sustained winds of 184kph, with gusts of up to 227kph, CWA data showed. It was the same strength as Typhoon Gaemi, which was the most
TECH EFFECT: While Chiayi County was the oldest region in the nation, Hsinchu county and city, home of the nation’s chip industry, were the youngest, the report showed Seven of the nation’s administrative regions, encompassing 57.2 percent of Taiwan’s townships and villages, became “super-aged societies” in June, the Ministry of the Interior said in its latest report. A region is considered super-aged if 20 percent of the population is aged 65 or older. The ministry report showed that Taiwan had 4,391,744 people aged 65 or older as of June, representing 18.76 percent of the total population and an increase of 1,024,425 people compared with August 2018. In June, the nation’s elderly dependency ratio was 27.3 senior citizens per 100 working-aged people, an increase of 7.39 people over August 2018, it said. That
‘UNITED FRONT’: The married couple allegedly produced talk show videos for platforms such as Facebook and YouTube to influence Taiwan’s politics A husband and wife affiliated with the China Unification Promotion Party (CUPP) were indicted yesterday for allegedly receiving NT$74 million (US$2.32 million) from China to make radio and digital media propaganda to promote the Chinese government’s political agenda and influence the outcome of Taiwan’s elections. Chang Meng-chung (張孟崇) and his wife, Hung Wen-ting (洪文婷), allegedly received a total of NT$74 million from China between 2021 and last year to promote candidates favored by Beijing, contravening the Anti-Infiltration Act (反滲透法) and election laws, the Chiayi District Prosecutors’ Office said. The couple acted as Beijing’s propaganda mouthpiece by disparaging Hong Kong democracy activists
EARLY ARRIVALS: The first sets of HIMARS purchased from the US arrived ahead of their scheduled delivery, with troops already training on the platforms, a source said The Ministry of National Defense (MND) yesterday said it spotted 35 Chinese military aircraft, including fighters and bombers, flying to the south of Taiwan proper on the way to exercises in the Pacific, a second consecutive day it has reported such activities. The Chinese Ministry of National Defense did not respond to a request for comment on the missions, reported just days before tomorrow’s US presidential election. The US is bound by law to provide Taiwan with the means to defend itself. Its arms sales to Taipei include a US$2 billion missile system announced last month. The MND said that from 9am yesterday,