Fiat's hopes to take control of Opel seemed to be coming to an end last night as word emerged from the talks in Berlin that the German government and Magna International had reached an agreement that would allow 1.5 billion euros of emergency funding to be released.

Earlier on Friday morning Fiat had announced in a lengthy statement that it was backing out of the meeting due to "unnecessary and unwarranted risks" being placed on the bidders and that it hadn't had sufficient access to Opel's books to carry out any due diligence process. With the third official bidder, private equity house RHJ International, already out of the running following a chaotic midweek meeting, this left Austro-Canadian car parts maker Magna International as the only remaining candidate. It's bid is being financially backed by Russia's Sberbank with some additional support coming from Russian carmaker GAZ. Under the terms of the deal with GM, Magna will get a 20 percent stake in Opel, Sberbank will take 35 percent, GM will retain 35 percent, and Opel workers will get 10 percent. Magna will shed around 10,000 of GM Europe's 55,000 staff spread across Europe in Germany, Belgium, Austria, the UK and Poland, with around 2,500 job losses coming in Germany where Opel has 25,000 staff. Fiat's alternative proposal foresaw a complete takeover and the merging of Opel with its own automotive manufacturing operations.

"We have an agreement," the AFP news agency reported the German Finance Minister Peer Steinbrueck as saying late last night after lengthy talks between German cabinet members', regional state leaders, U.S. Treasury Department officials, and key representatives from GM and Magna. "You can be certain that we did not take this decision lightly, as all participants were very aware of the risks," Steinbrueck told reporters before adding adding: "But you have to weigh these risks against the risks that would have arisen if Opel were to be declared insolvent." The parties are now working on a Memorandum of Understanding.

Fiat CEO Sergio Marchionne meanwhile was in Montreal last night and he said his focus would now be on the deal with Chrysler. "We’ll be spending the next few days with the leadership [of Chrysler]," he told reporters. "We need to get the organisation kick-started for when it comes out of Chapter 11. That remains the primary objective." He was sanguine about the rapidly receding prospects of a tie-up with Opel: "If the Opel transaction is not available for Fiat, life will move on. We will continue to work with what we have," he said. He also revealed he was still "very much interested" in GM's Latin American operations while saying that although he was still interested in a possible takeover of Saab he was less so now as it shares so many components with Opel.