General Motors and the PSA Group have announced an agreement that will take GM’s Opel and Vauxhall European subsidiaries to join Peugeot and Citroen as part of the the PSA Group.
The transaction values Vauxhall/Opel at €1.9 billion and GM Financials European operations at €0.9 billion.
The transfer will make PSA the second largest automotive company in Europe, behind Volkswagen, with revenues of €17.7 billion and a 17% market share.
“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said Carlos Tavares, chairman of the Managing Board of PSA.
“We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalising on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”
“We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance”, said Mary T. Barra, GM chairman and chief executive officer.
Inevitably any change to the structure of loss-making Opel/Vauxhall will raise concerns in the UK, where the Vauxhall operations employ 4,500 people at Ellesmere Port and Luton.
The German Opel plants are believed to be more competitive. Adding to the worries as Britain pushes ahead with a “hard Brexit”, about 80% of exports from the UK Vauxhall plants are destined for the European Union.
Motoring heritage enthusiasts will also be concerned to see if the PSA Group continue using the Vauxhall name, with its 114-year history as a British car maker. Currently Vauxhall/Opel cars are sold under the Opel name in most markets, the Vauxhall name being retained for the UK.