FRANKFURT (Reuters) - PSA Group PEUP.PA has pledged to the German government to continue operating all four of Opel's German production sites as part of the French carmaker's planned takeover of General Motors' GM.N European arm, German Sunday paper Bild am Sonntag reported.

FILE PHTO: The logo of German car manufacturer Opel is pictured at the compnay headquarters in Ruesselsheim, Germany, February 14, 2017. REUTERS/Ralph Orlowski/File Photo

The planned sale was confirmed by both companies on Tuesday, raising the specter of cutbacks in the wake of a deal because Europe’s car industry has been dogged for years by overcapacity.

Government sources told Reuters that PSA had signaled it was open to German demands to preserve sites, jobs and existing collective bargaining contracts but talks with Britain, home to Opel’s sister brand Vauxhall, would also have to tie into a final job deal.

The paper said PSA’s General Counsel Olivier Bourges told two deputy ministers and an adviser to Chancellor Angela Merkel on Thursday that Opel would continue as a separate entity within PSA group and that no German sites would be closed, without specifying its sources.

The takeover deal will likely be signed by March 9, the beginning of the Geneva auto show, the paper added.

Germany’s economy minister Brigitte Zypries on Thursday said she expected the deal to go ahead, after the U.S. carmaker sought to allay fears of large-scale plant closures in the country.

Two sources close to PSA have, however, told Reuters that job and plant cuts were part of the tie-up talks, with the two British sites of Vauxhall in the front line.

PSA’s chief executive will meet British Prime Minister Theresa May to discuss the deal, officials said on Saturday, amid concern Britain’s departure from the European Union could put Vauxhall sites at a disadvantage to Opel’s.

Germany accounts for about half of GM Europe’s 38,000 staff, while there are 4,500 in Britain. Other countries with Opel production sites include Spain and Poland.

A PSA spokesman confirmed only that a meeting between PSA representatives and German officials had taken place last week and that discussions had been constructive.

Opel declined to comment.