General Motors and Canadian auto supplier Magna have reached a preliminary deal regarding GM's European Opel brand. According to Reuters, the companies have agreed on a plan to allow Magna to invest in the German automaker.
"We have an agreement in principle between GM and Magna," one source said. Magna and GM still have details to work out before the two are expected to meet with German Chancellor Angela Merkel. One government spokesman said separately that the meeting had been pushed back until 6 p.m. to provide time for the ongoing negotiations.
Since GM's impending bankruptcy was made clear, the German government has been scrambling to protect Opel's future. On Thursday a round of talks between the Germany, the U.S. government, and GM collapsed when Germany presented a plan to protect Opel's assets from GM creditors. The failed meeting prompted the today's new round of negotiations.
Meanwhile, Italian carmaker Fiat, the other company showing major interest in Opel, has decided not to partake in the talks. That decision has left the door wide open for Magna, which has been in intense discussions with GM representatives for the past 24 hours.
The deal is still pending the approval of U.S. officials for it to work, but the groundwork for the agreement between Magna and GM increases the chances that Germany will release the funds that Opel needs to continue operations.