Oct. 19 (Bloomberg) -- European Union and German officials said they’re working to avoid a dispute over 4.5 billion euros ($6.9 billion) in state aid backing General Motors Co.’s sale of its Adam Opel GmbH division to Magna International Inc..

EU regulators want to ensure that any government help for Opel’s disposal meets competition rules before a transaction takes place so they can prevent a long probe later, Industry Commissioner Guenter Verheugen said yesterday. German Economy Minister Karl Theodor zu Guttenberg said on Oct. 17 that he aims to provide “the right answers” to EU concerns that the aid may have influenced GM’s choice of Opel’s buyer.

GM is close to completing a contract to sell a 55 percent stake in Ruesselsheim, Germany-based Opel to Magna, Canada’s largest auto-parts maker, and Russian partner OAO Sberbank, three people familiar with the situation said on Oct. 15. Opel, surviving on 1.5 billion euros in German loans, may run out of cash in January, according to government and company officials.

“It’s definitely in everybody’s interest to get this sorted quickly,” Michael Schuette, a Brussels-based lawyer specializing in state-aid cases, said in a phone interview yesterday. “This is not something you want hanging around.”

Germany chose Magna as its preferred bidder for Opel in May. Detroit-based GM agreed to sell Opel to Magna in September after considering offers from RHJ International SA and Beijing Automotive Industry Holding Co. Fiat SpA, Italy’s biggest manufacturer, provided a non-cash offer in May that it declined to improve on.

Kroes’s Comments

European Competition Commissioner Neelie Kroes, who oversees EU antitrust policy, urged Guttenberg in a letter to let GM reconsider the other bids and to specify that government aid was open to any suitor, the EU said on Oct. 16. in a statement. A preliminary EU inquiry showed “significant indications” that Germany improperly favored Aurora, Ontario- based Magna, she said.

The European Commission, the EU’s executive arm, wants to “make sure that the solution that’s eventually found complies with competition law, so that a lengthy inquiry won’t be needed” following Magna’s takeover of Opel, Verheugen said in an interview broadcast yesterday by Deutschlandfunk radio. “Time is what we have least of all in connection with Opel and General Motors in Europe.”

The EU has the power to order companies to repay state aid when regulators find the money has distorted competition. Germany has argued that its lending Opel doesn’t need clearance because existing rules exempt aid for rescuing companies during the economic crisis from EU scrutiny.

‘Cautious’

“They have to meticulously follow the conditions under which the commission approved” Germany’s industrywide emergency-aid package, Schuette said. “That means they really have to be cautious.”

Karin Kirchner, a spokeswoman in Zurich for GM’s European operations, declined to comment. Edda Graf, a spokeswoman based at Magna’s European headquarters in Oberwaltersdorf, Austria, didn’t answer calls made to her office and mobile phone numbers.

In addition to the 1.5 billion euros already provided to keep Opel operating when Detroit-based GM filed for protection from creditors in the U.S. in early June, Germany is offering as much as 3 billion euros once the unit is sold.

A trust of executives and politicians from Germany and the U.S. now controls a 65 percent stake in Opel, with GM owning the other 35 percent. The trust chose Magna in September on GM’s recommendation. GM negotiators and government aides agreed in July to stop looking at a bid from Beijing Automotive.

Magna’s Backing

A number of German politicians, including Roland Koch, prime minister of Opel’s home state of Hesse and a member of Merkel’s Christian Democratic Union party, said in May that they favored Magna.

Klaus Vater, a German government spokesman, said on Aug. 14 that aid would be available to Brussels-based RHJ.

“A precondition for the aid would be incompatible” with EU rules that seek to limit state involvement in industries, Kroes said in the Oct. 16 statement.

Guttenberg told reporters in Berlin a day later that he plans to address Kroes’s concerns.

“If there are misunderstandings that need to be cleared up, we will do that,” Guttenberg said. “I’m confident this will happen in the coming days. Answers will be given, and they’ll be the right answers.”

RHJ’s Bank Purchase

RHJ, which agreed on Oct. 15 to buy Commerzbank AG’s Kleinwort Benson private-bank unit in the U.K., isn’t interested in reviving a bid for Opel, Arnaud Denis, a spokesman, said on Oct. 17. “We are not considering it,” Denis said. “This isn’t in the cards.”

Fiat Chief Executive Sergio Marchionne said in September that his company is “completely closed” to any further interest in Opel as it develops strategy for ties to Auburn Hills, Michigan-based carmaker Chrysler LLC. The Turin-based manufacturer declined to comment further on Oct. 17.

Beijing Automotive, China’s fastest-growing automaker, is now a suitor for Saab Automobile AB, another European division that GM is selling. The company joined a group in September that’s bidding for the unprofitable Trollhaettan, Sweden-based brand. Partners include sports-car manufacturer Koenigsegg Auto and entrepreneurs Augie Fabela II and Baard Eker.

To contact the reporter on this story: Jann Bettinga in Frankfurt at jbettinga@bloomberg.net.

Last Updated: October 18, 2009 18:00 EDT