GM in talks to buy small Peugeot stake: sources

Under the terms being discussed, GM would likely buy a stake of less than 5 percent in PEUGEOT (UG.PA) the sources said. A deal could be announced in the next few days, although sources warned that no deal has been reached and talks could still fall apart.

GM declined to comment. A Peugeot spokesman did not immediately return calls and messages seeking comment.

GM and Peugeot are discussing a broad strategic alliance designed to stem losses in Europe and cut production costs elsewhere, people familiar with the matter told Reuters last week.

For GM, an alliance would provide a means to lower operating costs at its loss-making European unit, Opel, while Peugeot would gain much-needed access to international markets at a time when auto sales in Europe are sagging, the people said.

(Reporting by Christian Plumb in Paris, Philipp Halstrick in Frankfurt and Soyoung Kim in New York; Editing by Phil Berlowitz)