PSA Group reached an agreement with General Motors to buy the U.S. carmaker’s loss-making European division and won the support of its own board for the deal on Friday, two sources with knowledge of the matter told Reuters.
The maker of Peugeot and Citroen cars plans to announce the acquisition early on Monday, the source said. Spokesmen for GM and PSA declined to comment.
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 Vauxhall brand by Paris-based PSA, sparking widespread concern over possible job cuts.
Sources close to the GM-PSA talks had said on Thursday they were progressing well after the companaies narrowed differences on about £9 billion in Opel pension liabilities and other issues. GM’s European arm recorded a 16th consecutive year of losses in 2016.
The talks had also encountered difficulties over GM demands that a PSA-owned Opel be barred from competing against its own Chevrolet lineup in China and other overseas markets, they said.
The “non-compete” issues were finally resolved as GM agreed to inject “substantially” more into the pensions than the $1 billion to $2 billion it had initially offered, another person said on Friday.
The sources declined to give any further details.
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 (£1.75 billion) from the tie-up, sources have said.