PSA in Talks to Buy Opel

France’s PSA Group this morning confirms it is exploring several strategic initiatives with General Motors Co., including buying the U.S. carmaker’s Opel/Vauxhall operations in Europe.

Earlier on Tuesday Reuters and Bloomberg reported that a possible deal between the companies was in the works and could be announced within days. GM confirms the reports.

Combined, PSA and Opel would account for more than 16% of the European car market, second only to Volkswagen Group’s 24% share.

PSA notes the goals of any resulting partnership would be to improve operating efficiency, eliminate redundant operations and increase profitability through economies of scale. PSA also would gain access to Opel’s engineering and electric-car technology, while GM could rid itself of its money-losing European operations.

A short-lived earlier alliance between the companies ended in 2013 when GM sold a 7% stake in the French carmaker after expected savings didn’t materialize. However, GM and PSA still jointly produce minivans and SUVs as a result of that partnership.

In 2014, the French government and China’s Dongfeng Motor Group each acquired a 14% stake in PSA to help bail out the cash-strapped company. PSA has since recovered by focusing on more profitable models. The carmaker, which makes Peugeot, Citroen and DS brand cars, sold 3.14 million vehicles worldwide last year, up 6% over 2015. The company generates 60% of its sales in Europe.

GM has owned Opel since 1929, but the brand has struggled to make a profit for years. GM’s European operations lost $257 million in 2016 and $813 million in 2015. The company had hoped to break even in Europe last year, but those efforts were stalled by costs related to the U.K.’s vote to leave the European Union. Last week GM said it now aims to be profitable in the region by 2018.

Last November, Opel announced plans to launch seven new or updated models in Europe this year, which would be the biggest product rollout in the brand’s history. Opel and its British Vauxhall brand sold 1.16 million vehicles last year in Europe, capturing 6% share of the market. GM has said it aims to increase its share to 8% by 2022.