Canadian parts supplier Magna International Inc. has reached a tentative agreement with General Motors Corp. to acquire the U.S. auto maker’s Adam Opel GmbH German subsidiary, a source associated with the talks tells Ward’s.

Magna is in the driver’s seat, as they were willing to provide short-term financing,” the source says, noting a finalized deal is expected to be announced between 6 p.m. and 7 p.m. European time.

It is unclear how much financing Magna has agreed to contribute.

Much of the deal, which includes the British brand Vauxhall, hinges on acquiring €1.5 billion ($2.10 billion) in short-term financing from Germany’s federal government. The two sides also sought the establishment of a trust that would protect Opel from its creditors should GM declare bankruptcy in the U.S. on Monday as is expected.

Long-term, the German government is expected to contribute up to €6 billion ($8.5 billion) in additional aid for Opel.

Participants in the negotiations are rushing to get the deal finalized before the anticipated June 1 filing, the source says.

While it has yet to be determined how much of Opel each participant will receive, Magna in a statement last week said GM would maintain a 35% equity stake in the German auto maker, while Magna would control 20%; Russian lender OAO Sberbank 35%; and Opel employees 10%.

Magna has said Sberbank’s partial ownership of Opel would allow the auto maker to establish a presence in the Russian market.

Magna became the frontrunner in the bidding process after Fiat Auto Group CEO Sergio Marchionne decided to skip a negotiating session in Berlin.

Marchionne in a statement says issues that arose in the previous round of negotiations “left us perplexed.”

The German government has insisted any bidder for Opel contribute funds to keep the auto maker afloat until government financing could be raised, according to various news reports.

That funding requirement apparently drove Fiat from the negotiations.

“The last round of requests, which would require Fiat, among other things, to fund Opel on an emergency basis while the German government determines the exact timing and conditions of the interim financing, would expose Fiat to unnecessary and unwarranted risks,” Marchionne says in the statement.

Initially it was reported Opel needed €133 million ($188 million) of the €1.5 billion in government financing by June 1, but that was later upped to €450 million ($636 million), which GM said would be needed to pay creditors, including key suppliers.

bpope@wardsauto.com