Canada's Magna International Inc. has won a drawn-out auction for General Motors Co.'s Opel unit in Europe.

GM and German Chancellor Angela Merkel both confirmed Thursday that the U.S. automaker has picked a bid by Magna International Inc. and Russian bank Sberbank.

Chairman of Magna International Frank Stronach listens to speakers at the company's annual general meeting. The company won a drawn out battle for German carmaker Opel on Thursday. (Adrian Wyld/Canadian Press)

Under the terms of the Magna bid, Magna and Sberbank would get a 55 per cent stake in Opel. GM would hold onto a 35 per cent stake and Opel workers would get 10 per cent.

In siding with the Magna bid, GM's board rejected a competing offer from RHJ International, a Brussels-based investment house.

"We're confident that the Magna/Sberbank solution represents the best solution for the survival of the Opel and Vauxhall brands," GM vice-president John Smith said.

"This is what the government wished," Merkel said. "Opel still has a difficult way ahead of it, but … it's possible now that GM and Opel will find a new way in Europe."

Firewalls to be put in place: Magna

Magna chair Frank Stronach said the company will put up firewalls to ensure "a complete separation" between its current auto-parts business and Opel.

That assurance is meant to address worries GM had about Sberbank's ties to Russian automaker GAZ. GM was said to be concerned that the Russian automaker could use Opel technology to compete with GM's Chevrolet division in Russia.

About 18,000 Magna employees are members of the Canadian Auto Workers union. CAW official Jerry Dias said he sees the new pact as an opportunity for more auto parts work for Magna's Canadian workers.

But others say that's not too likely.

"To think that Magna could suddenly see an opening to start shipping its parts from Canada or the U.S. into vehicle assembly plants in Europe to build Opel vehicles … that seems pretty far fetched," said Tom Murphy, executive editor of Ward's AutoWorld, an industry publication.

Murphy told CBC News it's far more likely that parts for Opels will be made in Europe.

Opel Trust approves sale

Late Thursday, the Opel Trust gave its approval for the sale.

Fred Irwin, who chairs the government-backed trust set up to oversee Adam Opel Gmbh before GM's bankruptcy, said the company is confident that the decision will lay the foundation for a successful future of the Opel and Vauxhall brands.

Despite the trust's approval, the pact is not yet 100 per cent done. Written support from the automaker's labour unions and a definitive financing agreement with the German government are still necessary, GM president Fritz Henderson said Thursday.

Adam Opel GmbH employs more than 49,000 people in Europe, and made more than 1.4 million cars in 2008.

With files from the CBC's Mike Crawley and The Associated Press