GM, Chrysler Merger Talks on Hold: Report

A potential merger of

General Motors

(GM) - Get Report

and

Chrysler

has hit an impasse after the Bush administration ruled out funding for a deal, according to a published report.

This puts any merger of the struggling automakers on hold until after the U.S. presidential election,

Reuters

reports, citing sources with direct knowledge of the talks.

The development opens the door for

Cerberus

, Chrysler's owner, to restart talks with the Nissan-Renault alliance. Cerberus has seen a deal with the joint venture of

Nissan

(NSANY)

and

Renault

as an option outside of a GM acquisition of Chrysler.

GM had approached the

Treasury Department

in recent days about support for the merger through roughly $10 billion in funding that would have included taking an ownership stake in the merged company,

Reuters

reports. But a Bush administration official said Thursday the Treasury Department wasn't negotiating direct aid for the merger.

This article was written by a staff member of TheStreet.com.