General Motors is reported to have opened formal talks with US satellite TV group EchoStar which wants to buy the car firm's Hughes Electronics subsidiary.
The Financial Times web site said that GM contacted Echostar towards the end of last week in order to discuss its bid - now valued at around $29bn.
EchoStar chairman and chief executive Charlie Ergen said his company was now in 'direct conversations' with GM.
Hughes owns the DirecTV network, EchoStar's larger competitor in the US satellite television market.
Last week EchoStar presented an unsolicited all-stock bid for Hughes, and said it would consider adding a cash component if necessary.
The EchoStar bid threatens to spoil 11 months of negotiations by media magnate Rupert Murdoch's News Corp, which wants to combine its own satellite television subsidiary Sky Global with Hughes.
