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Opel/Vauxhall Joins PSA Group

Opel/Vauxhall Joins PSA Group

Well it is now official. French PSA Group has signed a deal to acquire Opel/Vauxhall and GM Financial’s European operations from General Motors in a deal valued at $2.2 billion. PSA has agreed to pay 1.3 billion euro for Opel/Vauxhall and .9 billion euro for GM Financial European operations.

Once finalized, the deal will create Europe’s second largest automaker, with approximately 17 percent market share on the continent. The deal has go to through multiple regulatory approvals, so a full close on it is not expected until the end of 2017.

For GM this marks the end of owning the German automaker for nearly 90 years. It also vindicates the belief that today’s GM is certainly nothing like the GM of the past, who would have never considered selling a business unit that sells over 1 million vehicles a year.

However, decades of operational losses and the lack of a clear plan to profitability yielded opportunity for PSA Group and GM. In fact, GM CEO Mary Barra calls the deal a “win” for both parties.

“For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum,” Barra said earlier in a statement. “We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.”

Meanwhile PSA Group is looking forward to greater economic scale by combining its brands with Opel/Vauxhall. PSA states they are expecting positive operating margins from Opel by 2020, with consistent profitability after that.

Today’s acquisition by PSA Group is the deepening of a strategic alliance formed between PSA Group and Opel back in 2012. At the time, the strategic alliance was simply for purchasing scale and collaboration on certain products between the two.

As the strategic alliance went on, apparently the two parties shifted talks from partnership to acquisition. The two companies then confirmed acquisition talks back in mid-February.

GM, so far, isn’t saying exactly what its plans in Europe will be going forward. The company has confirmed it maintains the ability to sell Cadillac and Chevrolet models in Europe, but the success of those ventures have been substandard in the past.

GM has also confirmed that PSA Group will be producing certain Holden and Buick products for GM in the coming years. Although not directly named, we’re assuming that means the new Holden Commodore and Buick Regal will remain as-planned.





 

About Nick Saporito

AutoVerdict Senior Editor Nick Saporito began writing about cars at age 13. Nick ran a couple of automotive enthusiast sites for several years, before taking some time off to focus on his career and education. By day he's a marketing executive in the telecom world and by night he hangs out here at AV. You'll find him focusing on tech, design and the industry's future.
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  1. Andrew_L
    Dequindre
    On the Buick and Holden side of things, they'll either get what Buick China, Chevy, or GMC can cook up. The Holden Acadia was recently introduced to Australia, so I imagine future GMC (and Chevy) products will continue to make their way to Australia.


    But will they even bother continuing with the Holden name or will they sell that name off too to position Chevy as the sole global entry level brand
    germeezy1
    This was just a continuation of an existing agreement which saw product twinned on PSA platforms. They absolutely need the economies of scale, and the volume.
    arutherford
    All of a sudden, Ford's and GM's global sales got a lot closer....
    Dequindre
    As sad as it is to see GM leave a continent they have been vested in since the 1920's, this seems like the right move. Even with an excellent slate of products on the Opel side, they couldn't turn a profit. Europe isn't known for being particularly business friendly (especially when it comes to manufacturing), so GM really had no choice.
    Dequindre
    nsaporito
    Immediate comment is that GM will not be re-entering Europe. They're on the record saying that “The mass-market opportunity in Europe is no longer compelling.”

    This is certainly not your father's General Motors, but it was a very savvy business move on their part. What I'm not seeing is the benefits to PSA Group...


    I'm not seeing much benefit to PSA either. Opel competes in similar markets as Peugeot, Citroen, and DS. I guess a lot of it will hinge on what kind of non-compete clause PSA will have to sign.
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