Post-Chrysler Fiat eyes GM's Opel, Vauxhall units

Italy's Fiat SpA is stepping up its plan to acquire a majority stake in General Motors Corp's German unit Opel, the next phase of its ambitious agenda to forge a three-way alliance between Fiat, Chrysler and Opel to create an automotive giant second only to Japan's Toyota in terms of production.

Fiat's chief executive Sergio Marchionne Fiat's chief executive Sergio Marchionne is meeting German government ministers on Monday to discuss a bid for Opel. Marchionne signed a partnership with Chrysler LLC in Washington last week.

Fiat's board of directors met on Sunday and authorised Marchionne to seek a potential merger between Fiat and GM's European operations, including German unit Opel and UK unit Vauxhall, according to a statement issued by Fiat on Sunday. If a deal is reached, Fiat will consider creating a new publicly traded company that combines the auto maker's car unit, Fiat Group Automobiles, with GM's European operations, the statement said. The three-way alliance is expected to generate €80 billion ($105.84 billion) in revenue a year.

Marchionne will ''over the next few weeks'' assess the viability of a combination and a new company, the board of the Turin-based carmaker said in a statement late last week. GM has clarified that it is open to offers for the Opel division, which is running out of cash and seeking 3.3 billion euros ($4.4 billion) in German government aid.

A spinoff of Fiat Automobile, which made up 45 percent of Fiat's 2008 sales, would leave Italy's largest manufacturer with assets such as the CNH Global NV agricultural and construction- equipment unit, and Iveco trucks.

Marchionne said last week he regards Opel as an ''ideal partner'' and would concentrate on buying that arm of Detroit- based General Motors after the Chrysler agreement. A combined company would have 80 billion euros in annual sales, the board said.