General Motors is to buy the remaining 51% of South Africa’s Delta Motor Corporation, subject to government approval, the two parties said on Wednesday, according to Reuters.
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The report said GM has a 49% stake in the Eastern Cape-based automotive manufacturer, acquired in 1997 when it returned to South Africa after 11 years, and negotiations for the takeover of Delta resumed last year.
Reuters said GM has in the interim appointed Robert Socia president and managing director of the new company to be named General Motors South Africa, and also named Jeffrey McGuire as human resources director of the new entity.
Socia is formerly a vice president of GM Europe in charge of worldwide purchasing, the report added.
“These appointments are subject to final government approval of GM’s proposal to purchase the remaining 51% of Delta Motor Co,” the parties said in a joint statement cited by Reuters.
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By GlobalDataAccording to the report, the country’s competition authorities are considering the transaction. Delta was formed in 1986 through a management buyout when the US automotive giant left South Africa in protest against the then apartheid regime, Reuters noted.
Analysts told the news agency that the move is necessary to give General Motors an export base.
Reuters noted that, if the deal is approved by the company’s Competition Commission, 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 shareholdings in local units.
Reuters added that Toyota Motor took control of Toyota South Africa two years ago and that South Africa has become an export-production base for overseas-based car manufacturers.
According to the report, Delta employs more than 4,000 people and assembles GM’s Opel brand Corsa and Astra cars and Isuzu light trucks. Last year, GM awarded Delta a contract to distribute Chevrolet products in South Africa, Reuters added.
