Official: PSA buys Opel/Vauxhall from GM
The French automotive group PSA (Peugeot, Citroën, DS) has come to an agreement with GM for the purchase of the latter’s European subsidiaries Opel and Vauxhall. Together, the five brands form the second largest automotive conglomerate in Europe, with a market share of 16%, after Volkswagen (24%), before Renault-Nissan (11%).
PSA pays 1.3 billion euros for Opel/Vauxhall plus 0.9 billion euros for GM’s financial branch in Europe. BNP Paribas Fortis will buy 50% of the financing business. As part of the deal, GM or its affiliates will subscribe PSA warrants for €0.65 Bn. These warrants have a nine-year maturity and are exercisable at any time in whole or in part commencing 5 years after the issue date.
The PSA group reckons it can easily recover these investments by an industrial cost saving of up to 2 billion euros per year by 2026, which should result from the joint-development and usage of platforms, engines and transmissions – not least those used for electric vehicles. Indeed, by acquiring Opel, PSA gains access to the promising Ampera-e’s technology.
"We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support," said PSA CEO Carlos Tavares in the official statement released this morning. "Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner." Tavares’ vision for a combination of PSA and Opel is to create a "European champion" by cutting costs, seeking synergies and exploiting the appeal of German engineering.
Consequences and outlook
Just three years ago, PSA itself was in a bad place and had to be bailed out by the French government and Dongfeng. Tavares has been streamlining the company and turned the situation around, enabling it to gather enough capital to seal a deal that was already long in the making. PSA promised the French state that there would be no job losses and the Germans that no plants would be closed before 2020, but it is unclear what the impact will be for the rest of Europe – like Spain, for instance, where Opel has a large assembly plant (Zaragoza).
Incidentally, the brand-new Opel Crossland X and Grandland X had already been joint-developed with PSA, making use of Peugeot and Citroën underpinnings. Together, the five brands offer an impressive line-up of both passenger cars and light commercial vehicles, covering virtually every market segment. For large fleet accounts, the new Franco-German constellation could result in one consolidated sales convention, yielding enhanced purchasing conditions.
Picture copyright: PSA, 2017
