FRANKFURT (Reuters) - PSA Group put new managers in place at Opel and Vauxhall on Tuesday, completing a 2.2 billion euro ($2.6 billion) takeover which helps the French company to become Europe's second-largest carmaker by sales.
General Motors <GM.N> is selling off its loss-making European operations to the owner of the Peugeot, DS and Citroen brands, which has a better track record of profitability in the business of manufacturing small cars in Europe.
PSA Group can now build the next Opel Corsa on the same underpinnings as the Peugeot 208 and Citroen C3 models, moving closer to attaining a goal of achieving economies of scale through building more than 5 million vehicles.
"We are witnessing the birth of a true European champion today," PSA Chairman Carlos Tavares said in a statement.
"We will assist Opel and Vauxhall's return to profitability and aim to set new industry benchmarks together."
Opel announced a new leadership team, installing PSA executives Remi Girardon as Vice President Manufacturing and Philippe de Rovira as Opel's new Chief Financial Officer.
Opel said it was planning a "much leaner" management structure which aims to unlock economies of scale and synergies in purchasing, manufacturing and research and development estimated at 1.7 billion euros ($2 billion).
The goal is to generate a positive operational free cash flow by 2020 as well as an operating margin of 2 percent by 2020 and 6 percent by 2026, Opel said in a statement.
Last week former Opel parent General Motors said it lost about $800 million in Europe in the second quarter, including charges related to the planned sale of Opel.
For General Motors the sale marks a retreat from Europe, a region where it has not been profitable since 1999 and a departure from the goal of being among the world's largest carmakers by sales.
Since taking over as GM's CEO in January 2014, Mary Barra has taken a closer look at profitability, withdrawing from markets including Russia and Indonesia, and pulling the Chevrolet brand out of Europe.
PSA confirmed it was in talks to buy Opel in February, and announced a 2.2 billion euro deal in March. The financial terms of the deal remain unchanged, an Opel spokesman said on Tuesday.
For PSA, buying Opel gives it control over a struggling joint venture which once attempted to co-develop 40 cars and vans with General Motors. The alliance, first unveiled in 2012, was rapidly scaled back to three shared projects.
GM and its European operations will not sever ties completely. Opel has committed to producing Buick-branded vehicles in German factories for General Motors well beyond 2019.
(Reporting by Edward Taylor; Editing by Maria Sheahan/Keith Weir)