Peugeot maker PSA has reached a deal to buy Opel and Vauxhall

Courtney Goldsmith
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The two carmakers have reached a deal, according to reports (Source: Getty)

French carmaker PSA has closed on a deal with General Motors (GM) to buy the firm's loss-making Opel division, which includes Britain's Vauxhall, according to reports.

The two groups announced today they will hold a press conference Monday morning - but they didn't specify a subject. Sources told Reuters PSA's board approved the deal yesterday and will publicly announce it Monday.

The US and French carmakers confirmed last month they were in talks to negotiate an outright acquisition of Opel and its British Vauxhall brand, leading to fears over job losses.

Vauxhall employs 4,500 staff in the UK at plants in Ellesmere Port and Luton.

Prime Minister Theresa May spoke with the boss of Peugeot SA to discuss the takeover bid, and the UK's business secretary, Greg Clark, has met with the French government and PSA.

Last week, after a "constructive meeting" with the PSA chief executive Carlos Tavares, Clark said Peugeot will stick to commitments made to Vauxhall factories in the UK.

"I was assured that the commitments to the plants would be honoured," he said.

Unite union said it is seeking assurances for UK car plants in line with Nissan's.

"The UK market is the largest market in the EU for Vauxhall/Opel so GM does have a moral obligation not to turn its back on the communities and workers who have helped make this company what it is today," Unite general secretary Len McCluskey said.

Opel managers adjourned a town hall meeting with workers until Monday morning, saying they could not yet discuss details of the proposed deal, Reuters said.

PSA’s takeover of GM in Europe will create the second largest European carmaker after Germany's Volkswagen if it is successful. It will also remove GM's presence in the UK and Europe altogether.

Tavares has turned PSA’s performance around since taking the helm, partially through a programme of aggressive cost-cutting, culling jobs in a successful bid to boost profitability.

Confirming the takeover, the companies said they were looking at ways of "improving profitability and operational efficiency."

GM reported a loss of $257m (£209m) from its European operations last year - its 16th straight year of losses.

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