France’s PSA Group will become the second largest automaker in Europe, knocking Renault down to third place, after striking an agreement with the U.S. carmaker General Motors to acquire its beleaguered European marque Opel and UK subsidiary Vauxhall.
GM’s European business has failed to book a profit since 1999.
According to Reuters, the PSA supervisory board approved the acquisition on Friday and an official announcement is planned for Monday, Reuters said, citing unnamed sources.
PSA will have the second most market share in Europe, behind Volkswagen, after its acquisition of Opel.
Acquiring Opel also means that PSA will become the owner of the Vauxhall brand in Great Britain, which has prompted widespread concern over potential job cuts.
Vauxhall has 4,500 employees in the UK at its plants in Ellesmere Port and Luton, while Opel has a workforce of about 19,000 people in Germany.
For the past weeks unions in the UK and Germany have lobbying PSA and GM on behalf of their respective workforces.
Concern over possible job cuts
Unite boss Len McCluskey and UK business minister Greg Clark both held talks with Carlos Tavares.
McCluskey said his meeting with Tavares was “relatively positive”.
McCluskey said: “Mr Tavares gave assurances that current production commitments would be met should the takeover with PSA go-ahead.”
“It was also heartening to hear that PSA group wants to work with Unite and recognises the skill and efficiency of our members who make the world class Astra and Vivaro vans.”
UK business minister, Greg Clark, said that his meeting with Tavares was constructive and reassuring.
“We discussed how PSA’s approach is to increase market share and expand production rather than close plants. I was assured that the commitments to the plants would be honored,” Clark said in a statement.
“There was also recognition that members of the Vauxhall pension fund will be no worse off.”
Video – What is takeover?
This short video explains what a takeover is. The term has the same meaning as ‘acquisition.’