PSA Group and BNP Paribas have announced a long-term partnership in automotive finance as the French automaker looks to take over the joint acquisition of Opel/Vauxhall’s financing activities.

Banque PSA Finance and BNP Paribas Personal Finance will each acquire 50% of the share capital of Opel/Vauxhall’s financing activities for a total of EUR900m (US$955m), representing a multiple of 0.8x the combined pro-forma Book Value of EUR1.2bn at year-end 2016. As per this partnership agreement, BNP Paribas will fully consolidate the entity.

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Opel/Vauxhall’s financing operations cover 11 European countries, serving nearly 1,800 dealers and have outstanding earning assets of EUR9.6bn at year-end 2016, of which EUR5.8bn are financed by deposits or securitisations.

Opel/Vauxhall’s financing operations offer a range of automotive financing products, including consumer loans, leases, dealer financing and insurance products.

“The operations will benefit from combined Banque PSA Finance’s and BNP Paribas Personal Finance’s expertise in automotive financing to better serve Opel and Vauxhall’s dealers and customers and support Opel and Vauxhall development,” said a PSA statement.

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The transaction will be financed from existing resources of PSA and BNP Paribas and will have an impact of close to ten bps on BNP Paribas Common Equity Tier 1 Ratio.

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Both boards of directors unanimously approved the partnership agreement.

The transaction is expected to close in the fourth quarter of 2017 and is subject to customary anti-trust and other regulatory approvals.

“Opel/Vauxhall’s financing operations are critical to the development of the Opel and Vauxhall brands,” said PSA chairman, Carlos Tavares.

For his part, BNP Paribas CEO, Jean-Laurent Bonnafé, added: “This partnership represents a great opportunity to further grow BNP Paribas Personal Finance’s footprint on the automotive financing business and is fully in line with our strategic goals for 2020.

“We have been a long-standing banking partner of PSA Group. We will capitalise on our complementary capabilities to best serve Opel and Vauxhall’s dealers and customers and support the Opel and Vauxhall brands.”