German Chancellor Angela Merkel says a deal to have Canadian auto parts maker Magna International acquire General Motors' Opel division will give the European automaker "prospects for the future."

The Ontario-based Magna had been competing for weeks to land control of Opel, which it finally did at the start of the weekend when the deal was approved.

Merkel spoke about the deal on Saturday, the same day her government agreed to provide US$2.1 billion in bridge loans, as well as $424 million for short-term expenditures, so that a trustee can take control of the company on Saturday.

"Opel has been given prospects for the future," said Merkel, following overnight talks involving her government, as well as the two automakers involved in the deal. "Now the work for Opel and for Magna ... really begins."

Magna will own 20 per cent of Opel, combining with the Russian-owned Sberbank's 35 per cent stake to take a majority interest in the company.

The Magna-Sberbank consortium hopes to work with Russian carmaker Gaz to make more than a million vehicles in Russia and Eastern Europe.

GM will also hold 35 per cent and Opel workers will take the remaining 10 per cent.

The financing of the deal must still be approved by parliamentary committees in two German states, though it is expected to be completed on Sunday.

Opel employs 25,000 people in Germany and constitutes almost half of GM's European workforce.

Some of GM Europe's other assets, including the British brand Vauxhall, are included in the trusteeship. The Swedish company Saab is not included in the deal.

The deal ensures that Germany's four Opel plants will remain open, though Magna recently said 2,500 job cuts are needed.

Avoiding the GM bankruptcy

The German government pushed to have Opel fall under the temporary control of a trustee, so that the company will not be affected from GM's presumed bankruptcy filing next week.

The government also wanted to ensure that the financial aid it was providing would not end up in GM's pockets in the United States.

"The fault here is ... a major mismanagement in the United States of America by GM," Merkel said.

In Canada, Canadian Auto Workers President Ken Lewenza was optimistic about what the Magna deal would means for Canadians -- but he said the deal was not without its risks.

Lewenza said the deal may make the Detroit Three automakers -- Chrysler, GM and Ford -- view Magna as a competitor, which could hurt the auto parts maker's core business.

He said the deal could one day lead to more jobs in Canada, but not when the market is struggling with overcapacity as it is now.

"Today, the market quite frankly doesn't need another entry," said Lewenza. "The reality is everybody is struggling ... with overcapacity."

Opel, GM to co-operate

Prior to the Opel deal being approved in Germany, GM Vice Chairman Bob Lutz had said he expected the new Opel would continue to share research and development activities with GM.

"It's a symbiotic relationship, and it saves a lot of cost, and I can't see a new partner saying, 'no, no, we're not going to do any of that anymore," Lutz said earlier in the week.

German officials, however, said GM's minority stake in Opel was dependent on the Detroit automaker's continued co-operation in automotive research.

GM and the Magna consortium will also negotiate competition agreements in markets where they will be selling vehicles built with similar technology. Magna's co-CEO, Siegfried Wolf, said he expected these agreements would be complete within the next five weeks.

Fiat Group SpA had been in talks to acquire Opel, but walked away from the bargaining table on Friday.

But Fiat CEO Sergio Marchionne said his company faced "unreasonable" funding demands that had been requested during negotiations.

Fiat is in the midst of taking a 20 per cent stake in Chrysler, which should be approved once the U.S. automaker clears restructuring efforts in a New York bankruptcy court.

With files from The Associated Press and The Canadian Press