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Historically I think Germany just collapsed the Vichy government and took over.

Is there an event for this in the game or do Germans have to attack it and conquer it?

I believe there is an event that fires for this once the allies (US?) lands in or conquers Algeria/Tunisia.
Otherwise, if you want it 'early' you have to attack and conquer it.

Yes, it fires after the US attacks a Vichy in Africa. At first the DoW by the US is protested and Vichy moves away from Allies a bunch, so you think it's a good thing, but it triggers a German event on your turn saying that Vichy wants to Surrender to the allies, unless you take quick action and seize it.