Canada’s Tesma, a part of Magna International, is considered the favourite to buy German trucks and engineering group MAN AG’s SHW unit, a company source told Reuters.

MAN reportedly said earlier this month it was in talks to sell its 50% stake in Schwaebische Huettenwerke (SHW), which supplies equipment to the paper production and automotive industries. The source told Reuters automotive parts supplier Tesma was interested in the unit and said the price for the 50% stake could come in at just more than €100 million ($US121.8 million).

A spokesman for MAN declined to comment to the news agency on possible buyers but said the company was in talks with several interested parties.

“A signing of the deal in the coming days or weeks is not imminent,” he reportedly said.

Reuters said the other 50% in SHW is owned by the German state of Baden-Wuerttemberg and newspaper Welt am Sonntag reported on Saturday the state was open to selling its stake but had not yet made a decision on whether it would.