DETROIT _ General Motors and PSA Group are edging closer to a deal that could vault the French automaker into second place among automakers in Europe.
GM and PSA revealed last month that they have been in discussions over a potential partnership or a sale of Opel, GM's European arm. Now, the two sides are planning to work through the weekend as they continue to try to hammer out some kind of an agreement.
"The discussions are going very well; I think everyone wants to reach an agreement," said Pierre-Olivier Salmon, spokesman for PSA Group. "So far they have not achieved a conclusion."
An acquisition by PSA Group, which includes the Peugeot and Citroen brands, of Opel would give the French automaker 16 percent of automobile sales in Europe, second only to Volkswagen, according to Evercore ISI.
"This company needs help," PSA Group Chairman Carlos Tavares said last month. "We believe that there is opportunity to create a European car champion."
There is sure to be additional urgency in the coming days because the automakers are unlikely want to announce a corporate tie-up during the Geneva Auto Show, which starts Tuesday. Automakers generally prefer when auto shows remain focused on new vehicles rather than corporate intrigue.
Additionally, Opel has scheduled a town hall meeting for workers at its headquarters on Monday morning, according to Reuters.
A spokesman for GM declined to comment.
GM's stock rose 48 cents, or 1.3 percent, to close at $38.23 on Friday.
Tavares has been working feverishly since news of a possible deal was confirmed Feb. 14 to convince politicians and union leaders that a combined company will not lead to job cuts.
Opel employs 34,500 people in Europe, with more than 16,500 in Germany and 4,500 in Britain.
Analysts, however, say a combination between PSA Group and Opel only makes sense if there are job cuts.
"PSA's ambition is to make the cooperation and the quality of relations with employee representatives a competitive advantage and a key factor in the success of the company," Tavares said in a statement on Feb. 21.
GM has been struggling to make money in Europe for years and nearly sold a majority stake in the unit in 2009.
"In (CEO) Mary Barra's GM, hard decisions are made with an eye on maximizing capital and satisfying investors. When coupled with increasingly complex regulations related to emissions, plus Brexit, selling Opel makes sense," Kelley Blue Book analyst Rebecca Lindland said in an email.
