Magna submits revised offer to GM for Opel

Magna and its Russian partner Sberbank have reached an agreement in principle with General Motors management over a contract to buy 55 per cent of GM's European unit Opel, Magna's co-CEO Siegfried Wolf told Reuters on Thursday.

However, the boards of GM Canadian automotive group Magna still need to approve a deal before trustees who control 65 per cent of Opel and its British sister brand Vauxhall give their final nod to the deal he added.

The agreement does not, however, mean that competing bidder RHJ International is out of the reckoning since the Belgian private equity firm has also reached an agreement with GM's chief negotiator.

Magna and RHJ have radically opposed plans for Opel with Magna looking to expand the troubled automaker while RHJ seeking it shrink it. A spokesman for RHJ said the company is still very much in the race.

The German task force will decide on the bids this weekend but a difference of opinion with GM could not be ruled out German chancellor Angela Merkel told a conference in Berlin. She added that the German government still favoured Magna.

She said the German government wanted a quick decision and has a clear preference for the Magna bid. She said it was possible a preliminary decision could be made next week.