Peugeot's parent company will continue to supply Holden with Europe-built vehicles following its planned acquisition of Opel and Vauxhall.

General Motors has agreed to sell its UK and Germany-based operations to PSA, the parent company for brands such as Peugeot, Citroen and DS, as part of a deal worth just more than $3 billion.

A joint statement issued by PSA and GM said the move will make it cheaper to develop and build future vehicles by distributing costs across five brands.The takeover could also help arrest Opel's under-performing run, making it profitable once again.

Together, the entities will form Europe's second-largest car company, sitting behind the Volkswagen Group and ahead of the Renault-Nissan Alliance.

PSA chair Carlos Tavares said a projected $2.4 billion in savings over the next decade will not be made through job cuts, and that his company will respect the "strong heritage" of Opel and Vauxhall.

"We intend to manage PSA and Opel/Vauxhall capitalising on their respective brand identities," he said.

"We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support."

Opel boss Karl-Thomas Neumann told journalists it was "an emotional day" for his company, adding that Britain's Brexit decision prevented it from breaking even in 2016.

GM chair Mary Barra said the deal "was a difficult decision for General Motors" but the right one for Opel, Vauxhall and its employees, putting them in "in an even stronger position for the long term". The Detroit-based concern says it plans to use around $2.6 billion generated through the deal to buy back publicly held shares.

Related Content Prototype drive: Holden Astra sedan

PSA and GM say they will work together on future projects surrounding electrification and mobility.

Without giving specifics - or taking questions from Australian journalists - both companies reiterated that "existing supply agreements for Holden and certain Buick models will continue" following the French takeover.

That news will be welcomed by Holden, which is increasingly reliant on European production of vehicles such as the Insignia and Astra, which replace the locally-built Commodore and Cruze.

For its part, Holden says "GM remains committed to the Holden brand in Australia and we don't expect any changes to Holden's vehicle portfolio".

"Right now we are focussed on ramping up Astra volume and preparing to launch the fantastic next-generation Commodore in 2018," it said in a statement.

While Holden has been able to effect changes to the engineering of next year's Germany-sourced Commodore replacement, its ongoing place within General Motors may make it harder to collaborate with European designers and engineers. Holden's Melbourne design studio has also worked on projects for Opel recently, but that may not continue in the future.

Opel launched in Australia in 2012 and shut its doors in 2013 following less than 12 months of lacklustre sales.

Go behind the scenes on Drive at Facebook, Instagram and YouTube