France's PSA Group is going to announce a deal to purchase Opel from General Motors on Monday after striking an agreement with the American automaker and winning the blessing of its board for the acquisition.
PSA boss Carlos Tavares says buying Opel offers an "opportunity to create a European auto champion" and at the same time it will help the conglomerate sell more than five million cars each year.
Two inside sources told Reuters that the deal will be formally announced on Monday.
Vauxhall employs 4,500 staff in the United Kingdom at plants in Ellesmere Port and Luton. There was also the matter of potential job losses, but PSA has made the promise to "respect the existing agreements".
PSA and GM are also discussing the French carmaker's ability to sell Opel vehicles globally and the US company's right to bring Chevrolet-branded models to Europe down the line, two people said. Detroit-based GM, which came close to selling Opel to Magna (MG.TO) in 2009, has faced investor pressure to offload its struggling European arm and focus on raising profitability rather than chase the global sales crown now held by VW.
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For PSA, the deal caps a stellar two-year recovery under chief executive Carlos Tavares, who is expected to slash costs at Opel in a bid to generate savings of up to 2bn euros a year.
The Detroit News reported that GM has lost approximately $20 billion in the European market in the last 20 years.
Nevertheless, Greg Clark, the Business Secretary, said last month that Vauxhall workers had no reason to fear for their jobs.
"I was assured that the commitments to the plants would be honoured", he said.
Mr Tavares recently told analysts last the acquisition offered an "opportunity to create a European vehicle champion" and quickly exceed 5 million sales annually. Other complex questions to resolve include licensing fees for technology used in Opel cars and plans to cut production capacity.