ROME - Fiat Group SpA confirmed yesterday that it is in talks to buy General Motors Corp.'s European operations in a move that, combined with its planned takeover of Chrysler LLC, would form one of the world's biggest car and truck makers.
The new auto manufacturer would have $105 billion in annual revenue, Fiat said in a statement.
Fiat said it is evaluating the possible spinoff of its auto business to form the core of the new company. Fiat Group Automobiles includes the Fiat, Alfa Romeo, and Ferrari brands.
The statement was issued on the eve of a meeting in Berlin between Fiat Group CEO Sergio Marchionne and the German economy and foreign ministers to discuss Fiat's offer for GM's German unit, Opel.
GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab.
Opel makes up 80 percent of GM Europe's revenue.
Fiat last week completed a deal with Chrysler LLC giving it a 20 percent stake in the bankrupt U.S. car maker that would rise to 35 percent as certain milestones are reached.
GM could follow Chrysler into bankruptcy within weeks.
Fiat's board met yesterday to review the Chrysler deal and weigh the potential merger of Fiat's auto group with GM Europe.
GM has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has received billions of dollars in aid from the U.S. government to avert collapse.
GM is looking to shutter several brands to focus on its core lineup of Chevrolet, Buick, GMC, and Cadillac. Pontiac was the most recent casualty of the vast restructuring, with GM aiming to phase out the brand by next year.
Opel has said it needs $4.3 billion to get through the economic crisis. The German government has said it doesn't foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees.
Fiat said that over the next few weeks, Mr. Marchionne will look "to assess the viability of a merger of the activities of Fiat Group Automobiles [including the interest in Chrysler] and General Motors Europe into a new company."
"As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe."
In addition to Fiat Group Automobiles, the Fiat Group includes its agricultural vehicles branch CNH and its Iveco trucking unit, as well as a media arm.
Mr. Marchionne previously said Fiat must sell between 5.5 million and 6 million vehicles to survive the auto industry crisis. With Chrysler in the fold, the combined firm's sales come in at about 4.2 million vehicles a year.
Fiat Chairman Luca Cordero di Montezemolo called GM's Opel an "ideal partner" and a possible Fiat takeover an "extraordinary opportunity."
Fiat is not the only suitor for Opel. Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg with what the minister called a "rough concept for a commitment with Opel."
Mr. Guttenberg has said the German government would wait to determine its role in any full or partial Opel sale until after the U.S. government had weighed in.
Fiat, meanwhile, has pressed ahead with a takeover of Chrysler. Chrysler filed a motion Saturday to sell substantially all of its assets to Fiat, but the ailing automaker still must deal with creditors who refused to come to a deal to erase its debt.41.90311 12.49576 ERROR: Template storyimage.ldo not found in theme default for section Automotive!
Fiat Group SpA confirmed Sunday that it is in talks to buy General Motors Corp.'s European operations in a move that, combined with its planned takeover of Chrysler LLC, would form one of the world's biggest car and truck makers. The new auto manufacturer would have $105 billion in annual revenue, Fiat said in a statement. Fiat said it is evaluating the possible spinoff of its auto business to form the core of the new company. Fiat Group Automobiles includes the Fiat, Alfa Romeo, and Ferrari brands.