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gb/pfd, dpa/AP/ AFPMay 4, 2009

German Economics Minister Karl-Theodor zu Guttenberg has expressed cautious optimism about Fiat's bid to buy struggling German carmaker, Opel. But, he also said he was open to bids from other suitors.

The picture shows a Fiat signet attached to the grille of an Opel
Fiat has presented a bold takeover plan for OpelImage: picture-alliance/ dpa

On Monday, the head of Fiat met separately with Guttenberg, Chancellor Angela Merkel and Vice-Chancellor Frank-Walter Steinmeier for high-level talks to discuss the Italian automaker's plans for an Opel takeover.

The CEO of Italy's Fiat, Sergio Marchionne, presented an audacious plan at the talks in Berlin to snap up all of US carmaker General Motor's European operations and merge them with bankrupt Chrysler to create a new global auto giant.

Photo of Fiat CEO Sergio marchionne leaning on the front end of the popular Fiat 500 sub-compact
Fiat CEO Sergio Marchionne's bid for Opel includes all of GM's European operationsImage: AP

Marchionne touted the plan as a "marriage made in heaven."

At a press conference after the talks, Guttenberg unveiled key aspects of the plan, but said more details were needed.

He said that "Opel would be maintained as a brand with a German headquarters, and that all three final assembly plants in Germany would be kept as well."

He did say, however, that there was a need for "consolidation of personnel and individual production facilities." In Germany, this could affect the factory in Kaiserslautern, the economics minister said.

Minister Guttenberg is shown at a press conference in Berlin where he unveiled details of Fia't takeover bid for Opel
Minister Guttenberg unveiled details of Fiat's takeover bid at a press conference in BerlinImage: AP

Marchionne's plan would create an industrial behemoth with annual revenue of 80 billion euros and a production capacity of between six and seven million vehicles a year.

The new pan-European auto manufacturer would be second only to Japan's Toyota, bigger than General Motors or Ford, and about the same size as Germany's Volkswagen, currently Europe's largest carmaker. The company would include the brands Fiat, Opel, Britain's Vauxhall and Sweden's Saab, as well as Chrysler.

The economics minister said Marchionne was looking to finance the deal without burdening what would be the Italian parent company with extra costs:

"Fiat wants to complete the deal without taking on additional debt," he said. "Transitional financing would be paid for with General Motors debt and the liabilities of the GM pension fund."

Fiat estimates this figure to be between five and seven billion euros, Guttenberg said.

Germany has also said it is prepared to provide up to 3.3 billion euros in interim financing guarantees. Marchionne said he wanted a decision within 30 days.

Fiat has offered around one billion euros for Opel, according to Rainer Einenkel, the head of Opel's works council in the German industrial city of Bochum.

Guttenberg expressed cautious optimism about the plan, but added that the German government remained open to other bids, notably from Austrian-Canadian autoparts supplier Magna, which is favored by German trade unions.