General Motors and PSA Peugeot Citro?n are poised to announce an alliance that will see the US carmaker?take a?7 per cent stake in its French counterpart and the companies building products and buying supplies together, two people briefed on the talks said yesterday.

Peugeot is planning a rights issue that would in part allow GM to enter its share capital, but would also provide the struggling French carmaker with extra funding, including for new projects launched by the partnership.

GM and Peugeot have been talking for several months about teaming up to develop and build engines, transmissions and vehicles, and combine their purchasing power. They had been working towards making an announcement at next week’s Geneva auto show, but will now probably reveal details sooner because of leaks to the press. Peugeot and Opel yesterday both declined to comment on the alliance talks.