Sept. 10 (Bloomberg) -- General Motors Co.’s board recommended Magna International Inc. as the buyer of its Opel unit, accepting the German government’s preference over a Belgian investor that the U.S. carmaker had favored, according to four people familiar with the decision.

Magna, Canada’s biggest auto-parts maker, was recommended by GM’s board at a meeting in Detroit yesterday, said the people, who asked not to be named because the decision isn’t yet public. Opel’s trustees are scheduled to meet this afternoon in Berlin to review the transaction, one of the people said.

GM, Magna and Germany resolved disputes over Opel’s access to GM intellectual property and financing issues in the past two weeks, the person said. German Chancellor Angela Merkel’s government, facing federal elections Sept. 27, chose Aurora, Ontario-based Magna and Moscow-based OAO Sberbank as the preferred bidder in late May. Germany had a say in the process as it offered 1.5 billion euros ($2.2 billion) in loans to keep Opel afloat, as well as additional credit guarantees.

“It seems Magna will get Opel,” Magna Co-Chief Executive Officer Siegfried Wolf said in a telephone interview, adding that he expects official confirmation from John Smith, GM’s chief negotiator, later today. “We have all the indications.”

Germany asked Detroit-based GM to cede a majority stake in Opel to outside investors earlier this year in exchange for loans the money-losing unit needed to survive. GM, which has run Ruesselsheim, Germany-based Opel since 1929, turned over control to the trust before filing for bankruptcy in June.

Vauxhall Brand

Opel and its sister Vauxhall brand in the U.K. have lost market share in Europe, accounting for 7.6 percent of industry sales in the region in the first half of 2009, compared with 8.5 percent in all of 2006.

Federal and state governments in Germany provided the 1.5 billion-euro short-term loans for Opel when officials designated Magna as preferred bidder. About 1.05 billion euros of the lending had been used as of Aug. 27, a government report showed.

Opel employs about 25,000 people in Germany, making up almost half of GM’s 55,000-strong European workforce, including the Saab division that the U.S. carmaker is also selling. Labor unions in the country also favored Magna’s bid over RHJ International SA’s.

Smith, GM’s top negotiator on the Opel sale, had called the offer by Brussels-based RHJ a “simpler proposal.” GM had expressed concern that its intellectual property in Russia would be at risk under an earlier offer from Magna.

Boon to Merkel

GM’s endorsement of Magna is a boon to Merkel, who has repeatedly said she prefers the parts maker’s plan over RHJ’s rival proposal. Merkel trusts that Magna will help save most of the 25,000 Opel jobs in Europe’s biggest economy at a time when unemployment remains voters’ No. 1 concern.

Yet, the Chancellor’s handling of Opel, especially her stubborn refusal to consider alternative rescue plans, has earned her criticism from analysts. The government’s performance has been “anything but a showpiece of shrewd bargaining,” said Uwe Andersen, a politics professor at the University of Bochum, the western German city where Opel employs about 5,300 workers.

Merkel’s backing for Magna has been shared by Foreign Minister Frank-Walter Steinmeier, her main Social Democrat opponent in the elections. Together with the labor unions, the Social Democrats quickly seized the Opel rescue as a possible electoral theme, prompting Merkel to follow suit.

“She swung behind Magna way too soon and has stuck with it since, even as realities at GM changed,” Andersen said. “This decision is belated vindication for her.”

The Opel trust and GM will announce the investor at a press conference at 4:15 p.m. in Berlin today. Fred Irwin, the trust’s chairman, and GM’s Smith will attend the briefing, according to an e-mailed statement from the trust.

To contact the reporter on this story: Jeff Green in Detroit at jgreen16@bloomberg.net

Last Updated: September 10, 2009 08:27 EDT