Magna says eyeing possible Opel stake

Mon May 4, 2009 5:55pm EDT
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TORONTO (Reuters) - Magna International Inc said on Monday it was in talks with General Motors Corp and German government officials about possibly taking a minority stake in GM's Opel unit.

The Canadian auto parts supplier said there was no assurance that any transaction would result from the talks.

Magna founder Frank Stronach said in an Austrian newspaper interview on Wednesday that his company was interested in "helping" Opel, which Magna supplies, but added that it was too early to know what role the auto parts giant might play.

Stronach said his company had about $1.5 billion in cash reserves and could easily enter into a business arrangement without endangering itself.

GM, which has been battered by the global slump in the auto sector, must sell a significant stake in Opel in order to secure about 3.3 billion euros ($4.4 billion) in German government loan guarantees.

Italian auto maker Fiat is also interested in the German automaker and its chief executive met with members of the German government on the matter on Monday.

Opel employs about 25,000 people in Germany and also has plants in Spain, Belgium and Britain.

(Reporting by John McCrank; editing by Rob Wilson)