The sum also includes the purchase of GM Europe's financial operations, in a separate deal with French bank BNP Paribas, PSA said.

The French company's statement said it intended to manage the enlarged group – the second largest in Europe with a 17% market share – by "capitalising on their respective brand identities".

PSA said it expected annual cost savings of around €1.74bn to be achieved across the enlarged business by 2026, with the bulk of them likely by 2020. However, it gave no firm news on whether it would result in any job losses.

Carlos Tavares, chairman of PSA's managing board, said:

"We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround.

"We respect all that Opel/Vauxhall's talented people have achieved as well as the company's fine brands and strong heritage.

"We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees."

His counterpart at GM, Mary Barra, added:

"We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects."

The general secretary of Unite, Len McCluskey, said:

"While initial discussions with the PSA Group have been relatively positive, our priority now is to ensure a long-term future for our plants and the tens of thousands of workers depending on them."

 

More details on PSA's plans are expected to be revealed when a news conference is held in Paris later on Monday morning.

Additional reporting by IRN