A potential Magna International offer for General Motors' European assets is seen as viable at GM in the US, people 'familiar with the situation' have said.

Magna's interest could frustrate efforts by Fiat to acquire GM assets in Europe, Latin America and South Africa alongside its planned alliance with Chrysler, Dow Jones reported.

German politicians have indicated Fiat's plans are more advanced but Magna's offer is viewed as a viable option and is receiving serious consideration, the report said.

"Both deals are viable and very much in contention with each other," a person familiar with the situation told the news agency.

Magna has remained tight-lipped about its interest in GM assets, which, Dow Jones said, were understood to focus on the Adam Opel AG unit in Germany, which would be used to expand into central Europe and Russia.

German newspaper Handelsblatt today said Magna International and Russian state lender OAO Sberbank were combining to bid for a majority stake in Opel.

Magna confirmed its interest last week, Dow Jones noted. CEO Donald Waker said then "we are in talks with Opel, GM and German government officials regarding potential alternatives for the future of Opel, which could include Magna taking a minority stake."

Canada's Globe & Mail newspaper reported that Aurora, Ontario-based Magna had proposed taking a 20% stake in Opel, alongside 35% held by other partners. GM would take 35% and employees would hold 10%.

Meanwhile, GM chief executive Fritz Henderson said on Monday the automaker would consider holding a minority stake in Opel.

Magna's negotiations are taking place in Europe, while Fiat's talks are centred on Detroit, the person familiar with the situation told Dow Jones. "Teams are working like crazy on both deals," said the source familiar with discussions.

The report added that German economics minister Karl-Theodor zu Guttenberg had said last week that Fiat's proposal was more detailed while Magna's was more of a rough concept being refined.

Despite its core components business having been hit by the slowdown in global auto production, Magna has C$1.3bn in cash that could be used to fund a GM deal, according to Dow Jones, which added that Fiat was understood to be proposing an initial cash-free offer, mirroring its planned investment in Chrysler.

Magna's investment would be around $260m, according to the Globe & Mail. Russian automaker OAO GAZ Group has confirmed its interest in partnering with Magna on an Opel deal, too, the news agency said.