South Africa’s Delta Motor Corporation said on Wednesday that General Motors had resumed negotiations to acquire a majority shareholding in the company, Reuters reported.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The report noted that General Motors has a 49% stake in the Eastern Cape-based automotive manufacturer, acquired in 1997 when it returned to South Africa after 11 years.
“General Motors Corporation has resumed negotiations with Delta Motor Corporation with a view to potentially acquiring a majority shareholding in the company,” Delta Motor Corp managing director Willie van Wyk reportedly said in a statement, adding: “Discussions, which commenced in September 2001, were temporarily shelved due to the uncertainty which was created as a result of global events at that time.”
Reuters said Delta was formed in 1986 through a management buyout when the US automotive giant left South Africa in protest against the then apartheid regime.
GM will join European and Japanese rivals such as BMW, DaimlerChrysler, Volkswagen and Toyota who have consolidated their positions in South Africa through either wholly owned subsidiaries or majority shareholding in the local units, the report added.
Reuters said Toyota Motor Corp took control of Toyota South Africa two years ago while South Africa has become an export-production base for overseas-based car manufacturers.
Trade and Industry Minister Alec Erwin reportedly welcomed the resumption of negotiations as a step in the right direction.
“I believe the potential return of General Motors marks a very important step forward in the South African automobile industry,” Erwin told Reuters, adding: “It is a statement of confidence in the achievements of Delta and in the future of South Africa.
Reuters noted that Delta employs more than 4,000 people and assembles GM’s Opel brand Corsa and Astra cars and Isuzu light trucks. This month, GM awarded Delta a contract to distribute Chevrolet products in South Africa, the report added.
