PSA agrees deal to buy European unit of GM
- Author: Zachary Reyes Mar 06, 2017,
Mar 06, 2017, 9:22
France's PSA Group will become the second largest automaker in Europe, knocking Renault down to third place, after striking an agreement with the US carmaker General Motors to acquire its beleaguered European marque Opel and United Kingdom subsidiary Vauxhall.
Buying GM's loss-making European operations will make PSA the continent's second-biggest auto maker after Volkswagen and ahead of French rival Renault.
While still yet to be confirmed, reports out of Europe this morning say that the PSA Group and General Motors have reached an agreement over the purchase of Opel/Vauxhall.
Questions also remain about the impact a deal could have on GM's car-engineering development. Now, the two sides are planning to work through the weekend as they continue to try to hammer out some kind of an agreement.
However, there were some difficulties in the acquisition clauses when GM demanded that the now PSA-owned Opel be banned from rivaling against its own Chevrolet vehicle lineup in China and other overseas markets.
"We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects".
Len McCluskey, general secretary of Unite, said thousands of Vauxhall workers at Ellesmere Port and Luton had endured a "nerve-racking" few weeks.
The Paris-based maker of Peugeot and Citroen cars plans to announce the acquisition early on Monday, the source said.
In 2012, GM and PSA announced a 10-year alliance that aimed to save $2 billion annually by 2017.
Vauxhall employs around 5,000 people in Britain.
GM's European operations have lost money for 16 consecutive years and were nearly sold in 2009. It opted to pull out of Russian Federation, stop manufacturing in Indonesia and Australia, and restructure in Thailand.
GM's stock rose 48 cents, or 1.3%, to close at $38.23 on Friday.