Bloomberg is reporting that General Motors and PSA could announce an acquisition deal for Opel as early as next Monday. Once closed, the deal will create Europe’s second largest automaker, combining the French automaker with the iconic German brand.
The two automakers have allegedly been discussing a potential acquisition for some time now, but news of the talks did not leak until February 14th. On the 14th both automakers confirmed the talks were taking place. Since then PSA and GM executives have been in discussions with externals, such as European governments and unions, to ease fears around the potential deal.
Both companies are slated to continue intense discussions during the weekend, attempting to finalize details. People familiar with the talks say that the complexity of the deal could delay the announcement beyond next week. However, if talks continue at their current pace a public announcement could occur as soon as Monday.
As an indicator that the talks are getting serious, PSA’s executive team has tentatively scheduled a meeting next week with European labor unions. PSA has confirmed that such talks are scheduled, but admits they could be postponed or rescheduled.
PSA executives are hopeful that the combination with Opel will yield 2 billion euro in cost savings. The savings will likely spur from joint-venture purchasing and capacity reductions – essentially added economic scale to both automakers.
GM’s gain from this sale is slated to be around $2 billion, half in the form of cash and half from a reduction in liabilities that PSA will assume as part of the deal.