Fiat Pulls Out of German Talks to Buy GM Arm

Prospective Opel buyer balks at new request for bridge funding

By Jason Farago

Posted May 29, 2009 5:39 AM CDT

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Fiat Pulls Out of German Talks to Buy GM Arm — The Chancellery in Berlin, Thursday, May 28, 2009. Chancellor Angela Merkel and ministers gathered for talks with representatives of GM, the US government and Opel's suitors, including Fiat. (AP Photo/Gero Breloer)

Fiat is boycotting talks in Germany today to acquire Opel, the European arm of General Motors, blasting GM for withholding financial information necessary for due diligence and balking at a new request for emergency funding. Fiat CEO Sergio Marchionne has taken part in days of negotiations with GM and German officials, including Angela Merkel, but yesterday talks fell apart after GM said Opel required an additional $418 million in bridge financing.

Fiat, which will also take a 20% stake in Chrysler following bankruptcy procedures, said it was not yet withdrawing its bit for Opel but insisted it wouldn't take "unnecessary and unwarranted risks." The Italian company's acquisition of the GM arm has been a critical component to Marchionne's plan to create a global automaker that can produce 6 million cars a year—seen as the threshold to turn a profit.
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