German Chancellor Angela Merkel said on Tuesday that she was ready to intervene personally to support auto parts group Magna's bid for carmaker Opel.
The battle for Opel appears to have narrowed to a two-way competition between Canada's Magna and Belgium-based investor RHJ International, but settling on a winner is proving to be difficult.
The German government has come out in support of Magna's offer, which is backed by Russia's Sberbank, but Opel parent General Motors has reservations about it and was unable to resolve differences in talks with the Canadian group late last week.
Opel labor leader Klaus Franz, who is also a board member, said on Friday that he wanted Merkel, who returned from a lengthy vacation this week, and Foreign Minister Frank-Walter Steinmeier to step in to and advance stalled talks between GM and Magna.
Merkel told RTL television in an interview on Tuesday that her goal was to help ensure that the Magna talks came to a successful conclusion.
I have a clear preference for Magna and want to make that clear again, Merkel said. We are in constant talks. I am always informed. If it is necessary, I will join in of course.
Merkel is due to travel to Sochi, Russia on Friday to meet with Russian President Dmitry Medvedev and Opel is expected to be on the agenda.
Medvedev expressed optimism during a visit to Germany last month that a deal could be clinched between GM and Magna.
However, GM's chief negotiator has praised the RHJ offer and the head of the investment group, Leonhard Fischer, told German newspaper Handelsblatt at the weekend that his firm still had good chances of prevailing against Magna.
Although GM is leading the talks on the sale, the German government is being asked to provide billions of euros in aid to the firm that eventually wins Opel and therefore has an important say in the decision.
Opel employs about 25,000 staff in Germany and, with a federal election looming next month, the government is keen to avoid an unpopular takeover and mass layoffs.
(Reporting by Andreas Moeser; writing by Noah Barkin; editing by Karen Foster)