The European arm of General Motors will be shielded from the expected insolvency of the US group after an 11th hour deal reached on Saturday morning that will see Magna International, the Canadian parts supplier, take over the business with financial backing from the German government.

After a day of drama following Fiat’s withdrawal from talks with Berlin, GM and the US Treasury to acquire the operations, which include the Opel and Vauxhall brands, exhausted negotiators announced the breakthrough at shortly after 2 am, after six hours of talks at the office of chancellor Angela Merkel.