Motors for Magna

General Motors (GM) has reportedly reached a tentative agreement with Canadian-Austrian car parts maker Magna International to purchase the carmaker’s European units.

The agreement was made between Magna and General Motors, according to news reports, but the deal will still need final approval from the German government, which will provide funding to the new owner.

German government officials including Chancellor Angela Merkel met late in the afternoon in Berlin on 29 May to discuss whether to approve the deal.

Magna emerged as the top bidder for GM Europe after its competitor Fiat reportedly shied away from the deal when it emerged on Thursday GM would need another £260m in short-term funding.

‘My gut feeling is that probably Fiat was the most realistic bid in that they probably had the most hard-headed approach to the situation and were prepared to be quite robust in its attempts to rationalise the situation,’ said Peter Wells, director of the Centre for Automotive Industry Research at the Cardiff Business School.