Magna gets early nod in race for GM's Opel

By Noah Barkin and Christiaan Hetzner

BERLIN (Reuters) - Magna International (MGa.TO) emerged on Friday as a favorite to acquire General Motors' GM.N Opel unit after top German officials said the Canadian car parts group had submitted a better plan than rival bidders Fiat (FIA.MI) and Belgian-listed private equity investor RHJ International (RHJI.BR).

At a briefing in Berlin, Magna co-Chief Executive Siegfried Wolf laid out the company's Opel plan for the first time, confirming it aims to team up with Russian partners but leave existing GM Europe managers to run the new group.

Crucially, Wolf vowed to retain all four Opel plants in Germany, where politicians face a federal election in September.

Late Friday, Magna said confirmed had teamed up with Russian bank Sberbank Rossii to submit a "non-binding indicative" offer to invest 700 million euro ($980 million) in Opel. It also said a portion of its investment would be guaranteed by the German government.

Under the offer, GM would keep a 35 percent equity stake in Opel, while Sberbank would take 35 percent, Magna would get 20 percent and Opel's employees would get 10 percent, Magna said in a statement.

"Under our concept the German sites are seen as assets and we want to keep as many jobs as possible," Wolf said. "There is a lot of know-how within the German Opel plants."

German Economy Minister Karl-Theodor zu Guttenberg emerged from a meeting of top ministers at which the offers were evaluated and said none of the bidders had been ruled out, but that the Magna offer had strengths.

"It would be premature to write anyone off. But it is true that we have heard many concrete things from Magna," he said.

German Foreign Minister and Vice Chancellor Frank-Walter Steinmeier described the Magna bid as the only "sustainable" plan among the three and said it would be examined closely.

Both ministers said a decision on a preferred bidder would come next week after another meeting of ministers on Monday.

But premiers of the four German states where Opel has plants had diverging views on the Magna plan. Most backed it but Juergen Ruettgers, premier of North Rhine-Westphalia (NRW), said it was unacceptable and needed changes.

Fiat Chief Executive Sergio Marchionne was cautious about the prospects for his company's bid in brief remarks to reporters.

"It's hard to say how it will end up," he said in Rome on Friday on his way to a dinner with bankers. "It's a complicated business because this is an election year in Germany."

He had been quoted in the Italian press on Thursday as saying Fiat's chances were better than 50 percent.

Opel unions also voiced opposition to the Canadian firm's plan, under which about 10,000 jobs would be cut in Europe, including some 2,500 in Germany. All but a few hundred of those would come from the Bochum plant in NRW.