Autosnewspaper.com

Continuing his shopping spree after picking up a 20% stake in bankrupt Chrysler , Fiat CEO Sergio Marchionne is in talks with GM to acquire GM Europe and its subsidiary, Opel .

As we have posted earlier, Opel is in dire straits, needing $4 billion to survive the Carpocalypse. The German state has thus far avoided a bailout, offering instead state support for potential investors.

Here is where Fiat enters the fray. The Wall Street Journal’s Stacy Meichtry reports:

Fiat ’s board of directors met Sunday and authorized Mr. Marchionne to seek a potential merger between Fiat and GM ’s European operations, including Opel and its U.K. unit Vauxhall , according to a statement issued by Fiat on Sunday. If a deal is reached, Fiat will consider creating a new publicly traded company that combines the auto maker’s car unit, Fiat Group Automobiles, with GM ’s European operations, the statement said. The three-way alliance is expected to generate ?80 billion ($105.84 billion) in revenue a year.

Fiat has been in talks with GM for months over the purchase of a majority stake in Opel , according to people familiar with the negotiations. Mr. Marchionne believes Fiat needs to sharply increase its current production of 2.2 million cars a year to gain economies of scale that could make Fiat viable in the future. Merging with Opel , in addition to Fiat ’s alliance with Chrysler , would allow the Italian auto maker to reach Mr. Marchionne’s goal of producing at least 5.5 million cars a year.

A deal with Opel isn’t expected to alter the Chrysler partnership. Fiat sees the two deals as complementary—Chrysler forming the backbone of Fiat ’s reentry into the U.S. market, while a deal with Opel would make Fiat one the biggest auto makers in Europe.

Unlike with future Chrysler -Fiats, we won’t need Photoshop to imagine future Opel -Fiats. General Motors and Fiat were in a partnership between 2000 and 2005 and the fruits of their dissolved marriage include cars like the Alfa Romeo Brera. A coup? comically Italian on the surface, yet built on GM ’s Premium platform and powered by GM ’s High Feature engine.

Source: The Wall Street Journal, Photo Credit: DAMIEN MEYER/AFP/Getty Images