By Jenny Gross in London and Ruth Bender in Berlin 

British Prime Minister Theresa May is expected to meet Peugeot Chief Executive Carlos Tavares this week to discuss the French car maker's proposal to buy General Motors Inc.'s Vauxhall unit, a U.K. government spokesman said.

At the meeting, Mrs. May will seek safeguards for Britain's car industry as she seeks to head off concerns that Britain's exit from the European Union will put the auto industry at risk. The deal--as part of a proposed acquisition of GM's Opel unit, based in Germany--would create Europe's second-largest auto maker by sales, and could affect thousands of British workers at unprofitable Vauxhall.

"The government is prepared to step up to the plate and play a role, as opposed to just letting it happen," said a U.K. official familiar with the discussions.

In Germany, where the deal has also drawn resistance from trade unions and politicians, Peugeot general counsel Olivier Bourges met last week with officials from the chancellery to discuss plans for Opel, according to a Peugeot spokesman and German officials.

Spokesmen for the German government and Peugeot declined to comment on the contents of the meeting. One official cautioned that it was just one of many currently taking place between the parties involved.

German Chancellor Angela Merkel has said her government would do everything to keep jobs and factories in Germany safe.

On Thursday, German Economics Minister Brigitte Zypries plans to meet her French counterpart in Paris.

In the U.K., the talks come as Britain prepares to start negotiations on its exit from the EU next month. Brexit has created particular uncertainty for auto manufacturers, which are highly dependent on the bloc for sales and parts. Executives have said stiff tariffs as a result of Britain's exit would threaten the U.K. sector.

In a meeting with Peugeot last week, Business Secretary Greg Clark gave the same assurances the U.K. government gave in October to Nissan Motor Co., the owner of the U.K.'s largest car factory by volume, the U.K. official said. It is unclear what form of support Britain promised aside from broad assurances that the U.K. would remain a business-friendly environment once it leaves the EU.

Mrs. May in October persuaded the Japanese car maker to keep producing cars in the U.K. after Britain leaves the EU, safeguarding 7,000 jobs after Nissan had threatened to move production out of the U.K. amid fears of higher taxes after Brexit.

Mr. Tavares is also set to hold talks with Len McCluskey, leader of Britain's biggest trade union, this week.

Write to Jenny Gross at jenny.gross@wsj.com and Ruth Bender at Ruth.Bender@wsj.com

 

(END) Dow Jones Newswires

February 19, 2017 11:21 ET (16:21 GMT)

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