The pursuit of German carmaker Opel appears to have narrowed to a three-way race between Italy's Fiat, Canadian-Austrian car parts group Magna and investment firm RHJ International.
Fiat confirmed it had submitted an offer for Opel and British brand Vauxhall, both units of struggling US carmaker General Motors, by a Wednesday deadline set by the German government.
A financial source told Reuters that RHJ had put in a bid and that Magna also was expected to.
Both GM and Germany, where Opel has four plants that employ some 25,000 staff, are in a race against time to finalize a sale of the group based in Ruesselsheim, western Germany. The US parent faces a June 1 deadline to restructure and is expected to file for bankruptcy within weeks.
Although GM will decide which investor gets Opel, the German government will also play a big role because it would likely provide billions of euros in financing to help any buyer.
How far Berlin should go to prop up Opel, which traces its roots back to the 19th century, has become a topic of fierce debate in the German capital ahead of a federal election in September.
Italy's Fiat, which recently agreed to take a stake in US carmaker Chrysler, would like to add Opel and other GM Europe assets to the mix to create the world's second-largest auto group behind Japan's Toyota.
Magna, a Canadian-Austrian car parts company, is also interested and has proposed opening up under-used Opel plants to other automakers. People familiar with Magna's plans told Reuters they include a partnership with Russian automaker GAZ which would offer Opel a stronger foothold in Russia, seen as a key growth market once global economies recover.
The third bid comes from Belgium-based holding company RHJ International, which has invested heavily in Japan in the past and also focused on the auto parts sector.
German Chancellor Angela Merkel met with top cabinet members on Wednesday to discuss Opel's future after Fiat CEO Sergio Marchionne traveled to Berlin on Tuesday evening and met with government officials to discuss his bid.
Should GM be forced into bankruptcy, the German government is keen to shield Opel from creditors of its US parent until a buyer is finalized.
It has a plan to place Opel assets with a trustee and provide bridge financing until a deal is completed, but there is resistance to this solution from members of Merkel's conservatives who are worried that the government may be over-stretching itself to save a failing carmaker.
Germany must also win US approval for its trustee scheme and a government spokesman said on Wednesday that a delegation stood ready to travel to the United States to discuss Opel.
On Tuesday, Berlin finalized an agreement whereby state bank KfW and the four German states with Opel plants will supply about €1.5 billion in financing to tide the carmaker over until a buyer for Opel is chosen.
The government has said it will examine the bids quickly but completing a deal could take months and will require delicate talks between Germany, the United States, GM and the eventual buyer.
Italy's industry minister said on Wednesday he believed Fiat had “good possibilities” to close a deal with Opel. But a spokesman for the German economy ministry said the competition was “open-ended” and that Berlin had no favorites.
“Fiat is one of several interested parties that submitted a bid,” German Foreign Minister Frank-Walter Steinmeier told the General Anzeiger newspaper.
“Now we can evaluate the offers. Our preference is for the investor that most credibly guarantees the four German plants and the most number of jobs.”
While the other bidders have kept a low profile, Fiat's 56-year-old Italian-Canadian CEO Marchionne has been cruising around in flashy sports cars, giving interviews and meeting government officials to drum up support for his plans.
Opel unions are skeptical about the Fiat bid, fearing their overlapping product ranges could spell plant closures in Germany, Austria, Britain or Belgium.
GM Europe head Carl-Peter Forster told a German auto magazine that the sale process could last until the fourth quarter of this year and that Opel's liquidity would last into the third quarter. (Reuters)