Peugeot and Citroen in 'final stages' of deal to buy Vauxhall

Economy Minister Brigitte Zypries said it was "unacceptable" that Opel and French firm PSA had not consulted ministers or unions before going ahead with the talks.

LONDON/FRANKFURT General Motors and PSA Group are in advanced discussions to combine the French carmaker with GM's European Opel business, two sources with knowledge of the matter told Reuters on Tuesday.

GM spokesman Tony Cervone confirmed that PSA's statement was accurate but declined to comment further. Selling to PSA is a lower risk in that sense because the two companies already share some engine and chassis technology.

Despite European cars sales at a nine-year high, auto makers have struggled to make a profit.

Any deal would have to overcome financial, industrial and political obstacles.

Opel sells cars in mainland Europe while its British sibling Vauxhall sells the same cars under its brand.

A combination would create a manufacturer with about 16 percent of the European vehicle market, pushing past Renault SA to become the region's second-biggest auto group after Volkswagen AG.

In 2016 Opel Vauxhall had a western Europe market share of 6.6%, while Peugeot, Citroen and its DS upmarket subsidiary had just over 10 per cent, according to Automotive Industry Data.

Vauxhall UK also has headquarters in Luton. However, its future under the possible control of Peugeot would be uncertain at best.

General Motors' European operations have been unprofitable for the past 16 years, with combined losses put at over $9.1 billion since 2009.

"Peugeot, of course, have a significant French government involvement, so it's important that our government is involved and Greg Clark has made it clear that the government will be involved", Mr McCluskey said.

Selling Opel and Vauxhall, which added nearly one million cars to its sales, could mean abandoning the global volume race in which it is ranked third behind Volkswagen and Toyota, with just over 10 million vehicles delivered past year.

CEO Carlos Tavares has turned Peugeot around since arriving from Renault in 2014.

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