US car giants General Motors and Chrysler are in talks about a possible merger, US media say.

Reports say the talks have been going on for a month but details of the deal vary from a merger to an acquisition by GM of Chrysler.

GM is the leading manufacturer and Chrysler third after Ford. All have been suffering with a plunge in US sales to 15-year lows.

Neither of the parties have made any direct official comment.

Ford move

Sources told the Wall Street Journal that Cerberus Capital Management, which owns 80.1% of Chrysler had proposed trading its automotive operations to GM in return for GM’s stake in the auto lender GMAC Financial Services.

The New York Times’s sources spoke of a merger that was a “50-50″ possibility, although it could take weeks to finalise and had been stalled by the turmoil in the financial markets.

GM spokesman Tony Cervone said: “Without referencing this specific rumour, as we’ve often said, GM officials routinely discuss issues of mutual interest with other automakers.”

Analysts have questioned Chrysler’s position, given its reliance on North America for 90% of its revenue.

Both companies have been hard hit by falling truck and SUV sales and are struggling to push through job cuts against union opposition.

GM shares hit a 60-year low this week. It posted a second-quarter net loss of $15.5bn.

Separately, Reuters reports that Ford is planning to sell most of its 33.4% holding in Japan’s Mazda.

News reported by The BBC

The Nationwide Building Society is in talks to merge with two of its smaller rivals, the Derbyshire and Cheshire Building Societies.

The Nationwide, the UK’s biggest mutual lender with 14 million members, is to step in to support the two firms with the approval of financial regulators.

Smaller lenders are under growing pressure due to the credit crunch.

The BBC’s Business Editor Robert Peston said members of the two smaller firms would not get any windfall payments.

Tough climate

Nationwide confirmed that it was in “advanced discussions” with the Derbyshire and Cheshire organisations about separate mergers.

The Derbyshire is the larger of the two, with 500,000 members, 50 branches across the Midlands, the North East and Yorkshire and total assets worth more than £7bn.

“The City watchdog, the FSA, wants them under the stewardship of the more robust Nationwide” BBC Business Editor Robert Peston

The Cheshire has about 400,000 members, operating 60 building society and estate agency branches.

It has assets of just under £5bn.

Both societies saw their profits fall last year, to £8.7m and £8.1m respectively, amid tough conditions in housing and credit markets.

Like all lenders, building societies have cut the amount of loans on offer and raised rates in response to the credit squeeze, although both Derbyshire and Cheshire insist they have strong mortgage books.

However, the negative publicity surrounding the near-collapse of Northern Rock has affected smaller banks and mutual lenders more.

When the Nationwide merged with the Portman last year, the latter’s members pocketed windfall sums of between £200 and £1,000.

But our correspondent said the sharp decline in the housing market ruled out the possibility of windfall payments in this instance.

News reported by The BBC

LONDON (Reuters) – Britain’s battered smaller banks and other lenders are ripe for merging to create a bigger, stronger bank, but fragile markets and a grim economic outlook are likely to delay consolidation until some stability returns.

Bradford & Bingley (BB.L: Quote, Profile, Research), the UK’s largest lender to landlords, is at the sharp end of concerns about smaller banks as it nears a 400 million pound cash call set to be backed by other banks but snubbed by its army of small shareholders as concerns over bad debts deepen.

An acquisition of B&B would solve a headache for regulators and the industry, removing the threat of a repeat of last year’s embarrassing collapse of mortgage lender Northern Rock.

Analysts and bankers say rivals Alliance & Leicester (ALLL.L: Quote, Profile, Research) and other lenders like Paragon (PARA.L: Quote, Profile, Research), Bristol & West (BKIR.I: Quote, Profile, Research), Cattles CTT.L and smaller building societies would all benefit from being pulled together. There are also multi billion-pound closed books of mortgages held by top investment banks that could be included.

Potential buyers or consolidators are watching with interest as valuations plummet, bankers and sources familiar with the matter, but they are not confident enough to pounce yet.

“It’s very difficult to make deals happen because share prices are just so volatile. You could start negotiations and two days later the share price is 20 percent lower,” said James Eden, analyst at Exane BNP Paribas. “And all the banks think they are worth more than the current price.”

The logic for bringing together several of the smaller banks or other lenders would be to cut costs, strengthen their capital base to withstand shocks, improve credit ratings, and reduce funding costs at a time of tough wholesale markets.

The most public move so far has come from entrepreneur Clive Cowdery, who wanted to inject 400 million pounds into B&B and use it to spearhead consolidation of smaller lenders.

News reported by Reuters