Carlos Tavares and Mary BarraFrance – In a €2.2 billion ($2.3 billion) deal, the French vehicle-maker will take control of GM’s two European brands plus its regional financial division. The transaction will make PSA the second-largest automotive company in Europe after the Volkswagen Group, with a market share of 17%.

“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said Carlos Tavares, chairman of the management board, PSA. He said the group would capitalise on its “respective brand identities”.

“Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner,” he stated. “We see this as a natural extension of our relationship and are eager to take it to the next level.”

PSA believes that its acquisition will create “substantial economies of scale”, enabling synergies in purchasing, manufacturing and R&D. The company estimates that annual synergies of €1.7 billion can be achieved by 2026, a significant proportion of these by 2020. Opel/Vauxhall would reach a recurring operating margin of 2% by 2020 and 6% by 2026, generating a positive operational free cash flow by 2020.

Opel/Vauxhall generated revenues of €17.7 billion in 2016 and the brands were valued at €1.3 billion during the acquisition.