Three-horse race

American parent GM said the bidders were Italian carmaker Fiat, Canadian auto parts firm Magna, and American investment fund Ripplewood, through its Belgian company RHJ. The Magna bid was made in conjunction with Russian automotive group G.A.Z..

General Motors Europe, which includes Germany's Opel and Britain's Vauxhall units, said the interest was an important step forward. The head of GM-Europe Carl-Peter Forster told journalists that GM "was happy about the interest of possible investors."

No details about the bids have been released. However, Berlin reportedly favors an investor that is already operating in the auto industry.

Germany has pledged to support its preferred bid with bridge loans valued at more than two billion euros, making it a virtual certainty that General Motors will sell to the bidder of Berlin's choice. German Labor Minister Olaf Scholz said a decision will be made by the end of next week.

German government to discuss the takeover

Chancellor Angela Merkel, Vice Chancellor Frank-Walter Steinmeier, and other top German politicians in Germany met on Wednesday to discuss Opel's future. Labor Minister Olaf Scholz, who had been part of the meeting, said the government would have to make a preliminary decision by early next week.

Although the final decision on who acquires GM Europe, which includes Opel in Germany and Vauxhall in Britain, lies with GM and the US government, Berlin's promise to financially support the bid that it favors makes the German government's blessing crucial for any company looking to secure the takeover.

GM Europe employs 54,500 people in seven countries, most of whom work for Opel. Around 29,000 people work in the company's four German factories.

With general elections on Sept. 27, Opel is becoming a key topic for Chancellor Merkel. The government has drawn up emergency plans that would introduce a special trustee to temporarily keep GM Europe afloat if its parent company in the US goes bankrupt before a takeover is complete.

Fiat offering "know-how"

Fiat wouldn't offer cash, but rather know-how and its vast sales network in exchange for Opel, according to an Italian press report. Quoting a letter of intent that Fiat had to submit to Berlin on Wednesday, Italian daily La Repubblica said that Fiat wanted to offer its "new generation engines, shared platforms, technology and its sales network in Latin America and in Asia, where Opel is not present."

This would be a similar deal to Fiat's acquisition of a 20 percent stake in US carmaker Chrysler, where the Italian firm offered its production technology in exchange for a share of the embattled company.

Rhineland-Palatinate favors Magna

The state of Rhineland-Palatinate has pledged 100 million euros ($137 million) to the company that takes over Opel, provided they keep the factory in the local city of Kaiserslautern open for business.

The western state's economics minister, Hendrik Hering, told local public radio that he considered the Magna offer most likely to succeed. According to Hering, Magna not only intends to keep all factories open, but also has conceived a better vision for the future of GM Europe.

nrt/AFP/dpa/AP
Editor: Nick Amies