UPDATE 1-Fiat could seek merger, listing with GM Europe

* Combined company would have yearly rev of 80 bln euros
* Fiat CEO meets German ministers on Monday
* German minister: Fiat must present long-term Opel plan

(Releads with Fiat statement; adds second byline)
By Ian Simpson and Erik Kirschbaum
MILAN/BERLIN, May 3 (Reuters) - Italy's Fiat SpA
could seek a merger of its auto group with General Motors
Corp's Europe unit, then spin off the combined company
and list it, Fiat said on Sunday.
Fiat Chief Executive Sergio Marchionne, fresh from a
partnership with ailing U.S. automaker Chrysler, will meet
German government ministers on Monday to discuss a bid for
German car maker Opel, part of GM Europe.
Fiat's board met on Sunday to review the Chrysler deal and
back Marchionne in weighing a potential merger of Fiat's auto
group, including "the Chrysler interest," with GM Europe into a
new company, Fiat said in a statement. [nBIA033a4]
"As part of this process, the Group would evaluate several
corporate structures, including the potential spinoff of Fiat
Group Automobiles and the subsequent listing of a new company
which combines those activities with those of General Motors
Europe," it said.
A combined company would have yearly revenue of about 80
billion euros ($106.3 billion), Fiat said.
The statement did not mention Opel, which makes up 80
percent of GM Europe's revenue. Under a GM restructuring plan,
Opel, including British affiliate Vauxhall, would be spun off.

LONG-TERM STRATEGY
Fiat is set on acquiring Opel after it struck a last-minute
deal to buy an initial 20 percent of Chrysler [CBS.UL] on
Thursday, just ahead of the deadline set by the Obama
administration to cement a partnership.
German Economy Minister Karl-Theodor zu Guttenberg said on
Sunday that Fiat -- and any investor -- had to present a solid
long-term strategy to keep Opel plants open to obtain German
government support.
"We will not enter into any financial adventure with
taxpayer money," Guttenberg said in an interview with Bild am
Sonntag newspaper.
Marchionne will be in Berlin to meet Guttenberg and Foreign
Minister Frank-Walter Steinmeier, the chancellor candidate for
the Social Democrats in September's election. Steinmeier has
spearheaded government efforts to keep Opel alive.
Aside from Fiat, Austrian-Canadian car-parts maker Magna
International Inc has also expressed interest in Opel.
Guttenberg said on Tuesday Magna had presented the rough
outlines of a rival offer to acquire Opel. [nLS805360]
Marchionne has said Fiat needed a partner to reach output
of 5.5 million to 6 million units a year, the scale he believes
necessary to survive the car industry crisis.
Opel staff, union leaders and some political leaders have
reacted with reservations to Fiat. Klaus Franz, works council
head of Opel and a supervisory board member, has said parties
other than Fiat and Magna were interested in Opel.
Opel, hit by a slump in demand due to the global downturn,
has four plants in Germany and employs about 25,000 workers
there. Thousands more jobs at suppliers are at stake.
German magazine WirtschaftsWoche cited sources close to the
talks as saying Fiat had made an offer for Opel of less than 1
billion euros, which GM considered inadequate.
The report said it was not clear if the original offer had
since been improved. A spokesman for Fiat declined to comment
on the report and GM could not be reached for immediate
comment.
($1=.7528 Euro)
(Additional reporting by Tyler Sitte in Frankfurt, editing by
Maureen Bavdek)
((ian.simpson@reuters.com; +39 02 6612 9666; Reuters
Messaging: ian.simpson@reuters.com@reuters.net))
Keywords: GERMANY OPEL/FIAT

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