Opel, PSA Group in talks to merge

PSA Group is discussing a potential acquisition of rival European carmaker Opel from General Motors, a spokesman for the French automaker said on Tuesday.

"PSA confirms that it is exploring a number of strategic initiatives with GM with the aim of increasing its profitability and operating efficiency, including a potential acquisition of Opel," company spokesman Bertrand Blaise said.

Reuters and Bloomberg earlier cited sources with knowledge of the matter as saying that talks between GM and PSA could lead to a merger of Germany-based Opel with PSA. A deal may be announced within days, Reuters reported. Spokespeople for Opel and the French government, which holds 14% of PSA, had no immediate comment.

Any deal would include Opel's UK affiliate Vauxhall, and create a carmaker with about 16% of the European market. GM and PSA are already close allies and share production of some SUVs and minivans, a relic of GM’s previous stake in the French car maker.

A combination would create a manufacturer with about 16% of the European car market, leapfrogging Renault to become the region’s second-biggest auto group after Volkswagen Group. A deal would also be the second run at linking the two mass-market carmakers. 
In 2009, after GM's bankruptcy the US car giant came close to selling German-based Opel, but changed its mind in order to retain a strong presence in Europe.