BERLIN – General Motors Corp., the German government and Canadian auto parts maker Magna have agreed on the framework of a deal for Magna to take a majority stake in GM's Opel unit, a person briefed on the negotiations said Friday.
Negotiators were working out the final details and an announcement could come within hours, said the person, who did not want to be identified because talks had not yet finished. It includes Magna International Inc. providing short-term financing to become the preferred negotiating partner for Opel.
The German government would put up a euro1.5 billion ($2.1 billion) bridge loan that would be repaid when the deal is closed.
There was no immediate comment from the German government.
Earlier Friday, Economy Minister Karl-Theodor zu Guttenberg said that GM and Magna were negotiating on "new ideas" from the bidder, which also were being examined by the German government.
The German government was to hold a second round of top-level negotiations on the future of Opel after talks snagged Thursday over new short-term funding needed to move Opel into an independent legal structure. The other suitor for Opel, Fiat Group SpA, stayed away from the talks, saying that it faced "unreasonable" funding demands — but CEO Sergio Marchionne stressed that Fiat was not withdrawing its bid.
Germany is looking for an agreement that will shield Opel — which employs 25,000 people in Germany, nearly half GM Europe's work force — from a looming GM bankruptcy court filing in the U.S. and extensive restructuring.
The government wants to make it legally independent under a trustee so that any taxpayer assistance does not go to the U.S., then would provide bridge financing while Opel looks for a new, permanent owner.
Aurora, Ontario-based Magna International Inc. is leading a bid for a majority of Opel from a consortium that also includes Russian lender Sberbank.
"I expect there to be a result today," said Juergen Ruettgers, the governor of North Rhine-Westphalia state — one of four in Germany that has Opel plants.
A government official, speaking on condition of anonymity because no official announcement had been made, said the meeting was expected to go ahead starting at about 6 p.m. (1600GMT), two hours later than originally expected. The reason for the delay was unclear, as was exactly who would attend.
GM Europe chief Carl-Peter Forster was seen going into the chancellery.
German officials blamed short-term financing needs they said were brought up by GM totaling euro300 million ($418 million) for preventing a decision earlier this week. The government has offered euro1.5 billion in bridge financing.
The government wanted bidders and GM to come up with an agreement on covering the short-term financial needs before Friday's meeting.
While Magna has previously indicated it would be willing to provide the additional funding, Marchionne said Fiat had decided to pull out of the continuation of the talks Friday because of the requirement for the emergency funds
Marchionne said it was "unreasonable" to expect Fiat to provide such funding because it had not yet had full access to Opel's financial records and could not determine "its precise financial condition and thus properly frame a merger proposal that would be fair" to both sides.
"The emergency nature of the situation cannot put Fiat in a position to take on extravagant risks," he said in a statement.
Taking over GM's European operations, including Opel and Britain's Vauxhall, is a key part of Marchionne's strategy of creating a car company with the capacity to produce 6 million cars a year, the threshold he says is necessary for an automaker to survive.
Fiat is on the verge of taking control of a 20 percent stake in Chrysler, pending the completion of restructuring in bankruptcy court in New York.
Separate to the Berlin talks, the European Commission was hosting talks among ministers to coordinate government efforts to save GM's European operations.
Opel and sister brand Vauxhall also have operations in Belgium, Spain and Poland among other countries. GM officials will not be present.
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