GM Generali

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The German government early Saturday said it selected Austrian-Canadian car parts maker Magna International Inc. (MGA) as a partner for General Motors Corp.'s (GM) German Adam Opel GmbH unit, ahead of a likely bankruptcy filing of Opel's parent GM in the U.S.

Speaking after hours of intense negotiations, German Finance Minister Peer Steinbrueck told reporters the German government is well aware of the risks posed by the deal, but nevertheless defended the rescue of the troubled German carmaker as justified.

Germany will provide EUR1.5 billion in bridge financing for Opel, paving the way for a takeover by Magna and its two Russian partners.

Steinbrueck said the EUR1.5 billion bridge financing, which it intended to keep Opel afloat until the details of a takeover by Magna are decided, is the upper limit the German government is willing to provide.

Steinbrueck said the parties involved also agreed on the model of a trusteeship for Opel for the interim period.

A press conference has been scheduled for Saturday at 8:00 a.m. GMT to explain further details of the Opel deal, the finance minister said.

-By Christoph Rauwald and Klaus Brune, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com