French car giant PSA Group has agreed to buy the European operations of General Motors, which includes both Vauxhall and Opel, in a deal worth £1.9bn.

The transaction includes six assembly and five component-manufacturing facilities, one engineering center in Rüsselsheim and approximately 40,000 employees. However, GM will retain an engineering centre in Torino, Italy.

The PSA Group, which is approximately 14 per cent owned by the French government, currently has three car brands, Peugeot, Citroën and DS, as well as a number of mobility and smart services under its Free2Move brand.

With Opel/Vauxhall coming under its umbrella, the French conglomerate is now set to become the second largest car manufacture in Europe, behind Volkswagen.

The deal also means GM, which was bailed out during the last financial crisis, will be making a complete exit from the European car market. The Opel/Vauxhall business has failed to turn any profit so far this century.

“We intend to manage PSA and Opel/Vauxhall capitalising on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support,” said PSA boss, Carlos Tavares (pictured above shaking hands with GM boss, Mary Barra).

Tags: business, Carlos Tavares, finance, GM, manufacturing, Mary Barra, PSA Group