PSA finalizes purchase of Opel/Vauxhall from General Motors

FRANKFURT, Aug 1 (Reuters) - PSA Group clinched the Opel and Vauxhall brands from General Motors on Tuesday, helping the French carmaker to leapfrog French rival Renault to become Europe's second-ranked carmaker by sales.

We are witnessing the birth of a true European champion today, PSA Chairman Carlos Tavares said in a statement. We will assist Opel and Vauxhalls return to profitability and aim to set new industry benchmarks together."

PSA revealed plans to buy Opel in March.

The combined entity will unlock economies of scale and synergies in purchasing, manufacturing and research and development estimated at 1.7 billion euros ($2 billion), the companies said.

The goal is to generate a positive operational free cash flow by 2020 as well as an operating margin of 2 percent by 2020 and 6 percent by 2026, Opel said.

($1 = 0.8454 euros) (Reporting by Edward Taylor; Editing by Maria Sheahan)