Peugeot-Citroen has agreed a deal to buy the Vauxhall and Opel brands from GM for €2.2bn.

In a statement released today, the PSA Group said that its takeover of the GM-owned brands - which made €17.7bn worth of revenue last year - would make the PSA Group the second largest carmaker in Europe. The deal is expected to conclude by the end of 2017.

PSA boss Carlos Tavares said that his company is “deeply committed to continuing to develop” both Opel and Vauxhall, to help “accelerate its turnaround”. 

The takeover will allow “synergies” in purchasing, manufacturing and research/development (read: savings). In fact, PSA reckons at least €1.7bn is expected to be saved by 2026, the majority of that coming earlier by 2020. It estimates Opel/Vauxhall to generate a “positive operational free cash flow by 2020”.

Both PSA and GM are expected to work together in developing electrification technologies, while managing supply agreements for Holden and some Buick models. PSA might even source fuel-cell systems from GM and Honda’s joint venture, the company 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,” said PSA boss Carlos Tavares. “We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalising on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.

“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,” he added.

Mary Barra, GM boss, added: “We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance.

“For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.

“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,” she added.

Stay tuned to TopGear.com for more updates and analysis…