The sale of Vauxhall edged closer yesterday after General Motors Europe, which owns the British carmaker and the Opel marque, reached draft agreements with two bidders.

Terms have now been settled with Magna International, the Canadian car-parts maker, and RHJ International, an investment fund, but it will be up to GM in the United States to decide between them. The German, British and US Governments and the Opel Trust will also have a say and the process is expected to take another couple of weeks.

Vauxhall, which employs 5,000 people at its plants in Luton and Ellesmere Port, was put up for sale when GM was forced into Chapter 11 bankruptcy protection in June. The sale also includes the Opel brand, which is primarily based in Germany.

Magna is considered favourite to buy GM Europe, but it was forced to sweeten its offer yesterday before a draft agreement could be reached.

Magna, which is backed by Sberbank, the Russian state bank, had asked for access to all GM’s intellectual property. This would have given it access to all design, engineering and manufacturing information for GM products worldwide. The Detroit company said that this was unacceptable and Magna has dropped its demand.

GM has also refused to give up control of its Chevrolet operation in Russia, which Magna had wanted to include in the deal.

Magna has already paid €300 million (£258 million) in emergency funding to keep GM Europe operating over the summer and it is thought to have offered a further €700 million to by a 55 per cent stake in the business.

If the deal is completed, Sberbank will hold 35 per cent of the company, Magna 20 per cent, GM 35 per cent and Opel workers 10 per cent.

The Canadians are understood to be keen to expand GM Europe into Russia using its connections with Sberbank and Oleg Deripaska — a former shareholder in Magna and close friend of Frank Stronach, its chairman.

Mr Deripaska owns GAZ, the Russian carmaker, and it is thought that the Russian state is backing the Magna bid so that it can gain access to Opel’s technology.

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