French carmaker PSA Group reached an agreement with General Motors to buy the U.S. carmaker’s loss-making Opel division and won the support of its own board for the deal on Friday, a source familiar with the matter told Reuters.
The Paris-based maker of Peugeot and Citroen cars plans to announce the acquisition early on Monday, the source said. Spokespeople for PSA and Opel declined to comment.
GM shares rose 1.4% to $38.28 in afternoon trading Friday on the news.
The two carmakers, which already share some production in an existing European alliance, confirmed last month they were negotiating an outright acquisition of Opel and its British Vauxhall brand by Paris-based PSA, sparking widespread concern over possible job cuts. Acquiring GM’s Opel and Vauxhall brands would give PSA a 16.3% share of the European passenger car market, vaulting it ahead of French rival Renault SA.
Earlier on Friday, Opel managers had adjourned a town hall meeting with workers until Monday morning, saying they could not yet discuss details of the planned acquisition.
PSA boss Carlos Tavares said last week a full acquisition of Opel offered an “opportunity to create a European car champion” and quickly exceed 5 million annual vehicle sales. The French carmaker also expects savings of up to 2 billion euros ($2.1 billion) from the tie-up, sources have said.
PSA and GM have tried before to combine their small cars in the failed centerpiece of a “global strategic alliance” unveiled in 2012, and rapidly scaled back to three shared projects from 40 initially considered.