SolarWorld GM purchase depends on bailouts failing

The proposed acquisition of Opel – the German division of general motors (GM) – by solar firm SolarWorld will only go ahead if potential US and German bailouts for the car manufacturer fail.

GM has said it will run out of cash as early as January if it does not get help from governments, which it considers preferential to a private purchase.

On Wednesday, the markets were shocked by SolarWorld announcing its offer to buy Opel's four German factories and a research centre for €1bn (£840m) to create green vehicles of the future.

GM immediately rejected the offer and said the division was not for sale, as it did when reports emerged that German car dealers were planning to table a bid for Opel on Thursday.

But both the dealers and SolarWorld said on Thursday that they were getting positive noises from inside Opel.

In an interview with Deutschlandfunk radio, SolarWorld chief executive Frank Asbeck said: "This is already in the heads of the developers at Opel, but they must be freed from the restraints of GM."

SolarWorld has some car making experience – the company sponsored and co-developed a high-performance solar sports car known as the "sun mobil" as part of a competition.

But German chancellor Angela Merkel has indicated that a bailout for GM's operations in Germany is a possibility, though the German government will wait to see whether the US bails out GM's operations stateside.

GM's shares swung wildly yesterday, as conflicting reports of a government bailout emerged hours apart. The latest reports indicate that an agreement is unlikely.

If, as seems likely, the US fails to negotiate a bailout, then the German government will swing into action.

Angela Merkel has said the German government would aim for a decision on any Opel support by Christmas.

A government spokesman said this morning that no decision would be made until Opel had made an official request.

It is believed the German division of GM needs a cash injection of close to €1bn in order to survive.