By Noah Barkin and Christiaan Hetzner
BERLIN/FRANKFURT (Reuters) - The pursuit of German carmaker Opel appears to have narrowed to a three-way race between Italy's Fiat <FIA.MI>, Canadian-Austrian car parts group Magna <MGa.TO> and investment firm RHJ International.
All three groups were expected to submit offers for the German unit of struggling U.S. carmaker General Motors <GM.N> by a Wednesday deadline, sources told Reuters.
Both GM and Germany, where Opel has four plants that employ some 25,000 staff, are in a race against time to finalise a sale of the group based in Ruesselsheim, western Germany. The U.S. parent faces a June 1 deadline to restructure and is expected to file for bankruptcy within weeks.
With the clock ticking down, the government has asked bidders for Opel to submit offers by Wednesday at 6 p.m. (5 p.m. British time).
Although GM will decide which investor gets Opel, the German government will also play a big role because it would likely provide billions of euros in financing to help any buyer.
How far Berlin should go to prop up Opel, which traces its roots in Germany back to the 19th century, has become a topic of fierce debate in the German capital ahead of a federal election in September.
"We expect at least three offers today," a spokesman for GM Europe said.
Italian carmaker Fiat <FIA.MI>, which recently agreed to take a stake in U.S. carmaker Chrysler, would like to add Opel and other GM Europe assets to the mix to create the world's second-largest auto group behind Japan's Toyota <7203.T>.
Magna, a Canadian-Austrian car parts company, is also interested, most likely in cooperation with Russian investors, and has proposed opening up under-used Opel plants to other automakers.
People familiar with Magna's plans told Reuters they include a partnership with Russian automaker GAZ which would offer Opel a stronger foothold in Russia's auto market, one seen as key for growth for all automakers once global economies recover.
A third bid is expected to come from Belgium-based holding company RHJ International <RHJI.BR>, a financial source told Reuters. RHJ has invested heavily in Japan in the past and also focussed on the auto parts sector.
TOP-LEVEL GERMAN MEETING
German Chancellor Angela Merkel met with top cabinet members on Wednesday to discuss Opel's future after Fiat CEO Sergio Marchionne travelled to Berlin on Tuesday evening and met with government officials to discuss his bid.
Should GM be forced into bankruptcy, the German government is keen to shield Opel from the creditors of its U.S. parent until a buyer is finalised.
It has developed a plan to place Opel assets with a trustee and provide bridge financing for the group until a deal is completed, but there is resistance to this solution from members of Merkel's conservatives who are worried the government may be over-stretching itself to save a failing carmaker.
Germany must also win U.S. approval for its trustee scheme and a government spokesman said on Wednesday that a delegation stood ready to travel to the United States to discuss Opel.
On Tuesday, Berlin finalised an agreement whereby state bank KfW and the four German states with Opel plants will supply about 1.5 billion euros in financing to tide the carmaker over until a buyer for Opel is chosen.
The government has said it will examine the bids quickly but completing a deal could take months and will require delicate talks between Germany, the United States, GM and the eventual buyer.
Italy's industry minister said on Wednesday he believed Fiat had "good possibilities" to close a deal with Opel. But a spokesman for the German economy ministry said the competition was "open-ended" and that Berlin had no favourites.
Fiat is interested in a range of GM assets, including Opel, Vauxhall, Saab and its Latin American and South African businesses.
While the other bidders have kept a low profile, Fiat's 56-year-old Italian-Canadian CEO Marchionne has been cruising around in flashy sports cars and his trademark sweater, giving interviews and meeting government officials to drum up support for his plans.
Opel unions are sceptical about the Fiat bid, fearing their overlapping product ranges could spell plant closures in Germany, Austria, Britain or Belgium.
GM Europe head Carl-Peter Forster told a German auto magazine that the sale process could last until the fourth quarter of this year and that Opel's liquidity would last into the third quarter.
(Reporting by Frankfurt, Berlin, Milan, Paris, London bureaus, Editing by Jason Neely)