Fiat Chief Executive Sergio Marchionne, fresh from a partnership with ailing US carmaker Chrysler, is meeting German government today to discuss a bid for German carmaker Opel, part of GM Europe.
Fiat's board met on Sunday to review the Chrysler deal and back Mr Marchionne in weighing a potential merger of Fiat's automotive group, including "the Chrysler interest," with GM Europe into a new company, Fiat said in a statement.
"As part of this process, the Group would evaluate several corporate structures, including the potential spin-off of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with those of General Motors Europe," it said.
A combined company would have yearly revenue of about 80 billion Euros (US$106.3 billion), Fiat said.
The statement did not mention Opel, which makes up 80 per cent of GM Europe's revenue. Under a GM restructuring plan, Opel, including British affiliate Vauxhall, would be spun off.
Fiat is reported to be set on acquiring Opel after it struck a last-minute deal to buy an initial 20 per cent of Chrysler, just ahead of the deadline set by the Obama administration in the US to cement a partnership.
German Economy Minister Karl-Theodor zu Guttenberg said on Sunday that Fiat, and any investor, had to present a solid long-term strategy to keep Opel plants open to obtain German government support.
"We will not enter into any financial adventure with taxpayer money," Mr Guttenberg said in an interview with Bild am Sonntag newspaper.
Mr Marchionne is in Berlin to meet Mr Guttenberg and Foreign Minister Frank-Walter Steinmeier, the chancellor candidate for the Social Democrats in September's election. Mr Steinmeier has spearheaded government efforts to keep Opel alive.
Aside from Fiat, Austrian-Canadian car-parts maker Magna International has also expressed interest in Opel. Mr Guttenberg said that Magna had presented the rough outlines of a rival offer to acquire Opel.
Mr Marchionne has said Fiat needed a partner to reach output of 5.5 million to 6 million units a year, the scale he believes necessary to survive the car industry crisis.
Opel, hit by a slump in demand due to the global downturn, has four plants in Germany and employs about 25,000 workers there.
German magazine WirtschaftsWoche cited sources close to the talks as saying Fiat had made an offer for Opel of less than 1 billion Euros, which GM considered inadequate.