GM currently owns 7% of Peugeot, and the Peugeot family owns 25.4% with 38.1% of the voting rights. The thing is that the company hasn't been doing terribly well, and the Peugeot family's only option to avoid bankruptcy is probably to sell that 25.4% stake. China's Dongfeng has been contacted, but that deal went through, so now the family is courting GM for the sale.
If it goes through, one can expect many of Peugeot's and Opel's plants to be consolidated, as there would no doubt be some overlap in what they could accomplish, and this is the lynchpin in the deal. If GM can be assured that it won't be needlessly expensive to cut plants and jobs in France, the deal will probably go through.
While we worry that this could dumb down Peugeot, we're also hopeful that these create French designers could instill a bit more joie de vivre in GM's design.