France's PSA completes acquisition of Opel

The final contracts for the sale of traditional German carmaker Opel to French automotive firm PSA have been signed, Opel told press at its headquarters on Tuesday.

The fusion will create the second largest carmaker in Europe by sales with a market share of roughly 17 percent, surpassed only by Volkswagen AG.

Opel was bought by General Motors in 1929 and was once the biggest German carmaker. The firm had struggled financially in more recent years, however, and together with its British sister brand Vauxhall, has failed to post an annual operating profit since 1999.

As a consequence, Opel now faces a restructuring process which PSA director Carlos Tavares wants to leave in the hands of the firm's German management. Opel's turnaround plan would not be directed from Paris, he insisted.

Opel's new CEO Michael Lohscheller will design and present a corporate strategy within the next 100 days. The PSA controlling executive Philippe de Rovira will join as the firm's new chief financial officer.

"Opel will remain German and Vauxhall will remain British. They complement our existing portfolio comprised of the French brands Peugeot, Citroen and DS automobiles perfectly," Tavares said in a statement.

EU competition authorities have approved the merger which has been under negotiation since March. PSA acquired General Motor's European divisions and financial services unit for around 2.2 billion euros (2.5 billion U.S. dollars).

Opel/Vauxhall has some 38,000 employees in seven European countries, half of which are based in Germany.