U.S. car maker General Motors Corp could take a stake in a group created by merging its European business and that of Fiat, a source close to the situation told Reuters on Thursday.

GM and Fiat are in talks to merge their operations in Europe.

Although Fiat would not need financing for the deal, it would inject working capital in the merged group at some point, the source said.

Its plans for the merged group would not lead to plant closures but a downsizing, the source said, confirming a report by the New York Times.

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