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PSA Purchasing Opel for $2.5B

But GM will remain on the hook for up to $4.5b in pension liabilities.

by on Mar.06, 2017

The ldeal between PSA Group and General Motors was sealed with a handshake between PSA chief Carlos Tavares and GM Chairman and CEO Mary Barra.

This story has been updated with additional information.

General Motors Co. and PSA Group have agreed to a deal in which the French automaker will take over GM’s long-struggling Opel/Vauxhall subsidiary, as well as the Detroit maker’s European financial operations for 2.2 billion euros or $2.5 billion.

For GM, deal ends the company’s long history in Europe, stretching back to the Opel acquisition in 1929. However, it doesn’t completely end the massive losses that have piled up for Opel since it last went into the black in 1999. As part of the deal, GM will retain all of Opel Vauxhall’s pension liabilities and is expected to take a $4 billion to $4.5 billion one-time charge once the deal closes later this year.

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While it ends GM’s long legacy as a truly global automaker, the sale will allow the Detroit carmaker to more fully focus on its two key markets: the U.S. and China. For PSA – which pulled out of the North American market a quarter century ago, the acquisition transforms it into Europe’s second-largest automaker, with a 17% market share, behind only the Volkswagen Group. (more…)

GM Hoping to Close Opel Sale Before Geneva Motor Show

Deal would create Europe’s second-largest automaker.

by on Mar.03, 2017

PSA CEO Carlos Tavares believes the acquisition of Opel could net $2 billion in savings. The two sides are racing to close the deal, perhaps before Geneva.

General Motors and France’s PSA Group are racing to close the sale of the U.S. maker’s Opel unit, possibly before the opening of the Geneva Motor Show next week, according to various sources and European news reports.

The move, if it can be completed, would transform a revitalized PSA – parent of the Peugeot and Citroen brands – into the Continent’s second-largest automaker behind Volkswagen Group. For GM, it would allow the maker to walk away from a long-troubled unit that hasn’t posted a profit since 1999, despite repeated turnaround efforts.

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GM CEO Mary Barra said virtually nothing about the status of the negotiations during an appearance in Washington, D.C. earlier this week, and neither company has been willing to discuss the talks since then. But a meeting between PSA management and European labor officials is scheduled for next week, according to a Bloomberg report, a strong hint that negotiators are optimistic about clinching an agreement by then. (more…)

PSA Eyes Big Savings in Potential Opel Deal

Negotiations on sale are ongoing.

by on Feb.24, 2017

PSA CEO Carlos Tavares believes the acquisition of Opel could net $2 billion in savings.

PSA Group’s proposed acquisition of Opel would create savings of as much as $2 billion from the General Motors’ European division’s turnaround, the French carmaker’s Chief Executive Carlos Tavares said during a session with reporters and analysts.

Tavares said adding the German Opel and British Vauxhall brands to PSA’s portfolio would bring new customers to the company who have been reluctant to buy French cars, Tavares told said, while generating savings from shared technical underpinnings.

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“There is significant complementarity in terms of customer consideration between the German Opel brand and our three French brands,” Tavares said, referring to the French group’s Peugeot, Citroen and DS badges. (more…)

GM Stock Could Pop on Opel Sale

Sale of unprofitable business could net shareholder windfall.

by on Feb.20, 2017

Mary Barra, GM chairman and CEO, met with leaders in Germany to assuage concerns about the potential sale of Opel to PSA.

Shareholders reacted skeptically to last week’s announcement that General Motors was in discussions to sell off its money losing European operations anchored by the Opel and Vauxhall brands to the Paris-based PSA Group.

But the weekly financial magazine Barron’s gave the proposed sale of Opel a boost when it said GM’s share could increase in value by as much as 35% if the deal was finalized and GM succeeds in finishing the sale.

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If the deal goes through, it could net GM as much as $1 billion in cash, Barron’s says, citing analysts. However, the real value from the sale would come from offloading a money-losing business and refocusing on operations in China, Latin America and North America, it said. (more…)

GM, PSA Getting Pushback on Potential Opel Deal

German, British unions and governments against the sale.

by on Feb.16, 2017

GM is re-examining its European operations, specifically, the UK, in light of the "Brexit" vote.

General Motors’ plans to sell off its money-losing Opel unit is running into political and union opposition in both Germany and Great Britain.

GM is proposing to sell Opel to the French-based PSA Group, which it is assumed will move to reduce costs, shed some of the excess capacity and move to consolidate product lines. Excess capacity has long been identified as a major problem in the European auto industry but governments and unions throughout Europe have made it extremely difficult to close plants

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Germany’s federal government and influential unions, which are already facing the threat of major job losses at Volkswagen in the wake of the diesel scandal, have moved quickly to criticize the proposed GM-PSA deal. (more…)

GM – Peugeot Announce “Broad-Scale” Alliance

Partners anticipate improved European competitiveness.

by on Feb.29, 2012

The new partnership brings "tremendous opportunity" for both companies says GM CEO Dan Akerson.

General Motors and PSA Peugeot Citroen have confirmed the creation of a “long-term and broad-scale” strategic alliance they expect to contribute to improved profitability and competitiveness, especially in the weak European market where both makers have been struggling.

As part of their new partnership GM will take a 7% equity stake in the French manufacturer, becoming the second-largest shareholder in PSA after the founding Peugeot family, which will continue to hold a one-third stake in the firm.

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“This partnership brings tremendous opportunity for our two companies,” said Dan Akerson, GM CEO and Chairman. “The alliance synergies, in addition to our independent plans, position GM for long-term sustainable profitability in Europe.”

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Could Fiat/Chrysler Make a Bid for Peugeot?

Marchionne hints he may try to outbid GM for French alliance.

by on Feb.29, 2012

Might Fiat/Chrysler CEO Sergio Marchionne be the spoiler in talks between GM and Peugeot?

Might the Fiat/Chrysler alliance try to outbid General Motors to set up a global automotive powerhouse with French automaker PSA Peugeot-Citroen?

It’s clear that Fiat/Chrysler CEO Sergio Marchionne sees that as a potentially powerful alternative to letting PSA tie up with General Motors.  As TheDetroitBureau.com reported this week, GM is apparently seeking a 7% stake in the French company, while the two partners would set up a series of joint ventures to develop new products and powertrains.

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But according to a report by Dan Howes, of the Detroit News, Marchionne is ready to step in as the spoiler.  He previously considered an alliance with Peugeot, having approached the French maker with the idea of an alliance during the Geneva Motor Show three years ago, even as Fiat was considering the option of buying GM’s struggling Opel division – then on the auction block.

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GM May Take 7% Stake in France’s Peugeot

Proposed alliance unlikely to resolve GM's Opel problem.

by on Feb.28, 2012

Will GM CEO Dan Akerson approve an alliance with PSA Peugeot-Citroen?

General Motors could take as much as a 7% stake in French automaker PSA Peugeot Citroen as part of a new alliance the two manufacturers are putting into place.

The alliance is expected to involve a variety of different areas of business, notably including joint vehicle and powertrain development, according to knowledgeable sources.  The key goal for both manufacturers would be to improve their economies of scale, especially in Europe, where GM last year lost $747 million.  But whether the proposed alliance will help turn things around for GM’s red ink-stained Opel division remains to be seen.

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Peugeot is the Continent’s second-largest maker on a unit sales basis but has serious problems of its own, rising debt leading it to plan a 1 billion Euro ($1.34 billion) rights offering that notably could reduce the holdings of the founding Peugeot family.

Beyond possible cross-holdings, the alliance appears to focus on three areas, according to sources: (more…)

GM in Alliance Talks With PSA Peugeot Citroen

Makers discussing “cooperations and alliances.

by on Feb.22, 2012

Does GM CEO Dan Akerson see a partnership with PSA as a way to solve Opel's problems?

General Motors and PSA Peugeot Citroen have confirmed they have begun discussing “possible cooperations and alliances.”

Both makers cautioned that their talks are still too early to discuss in detail, though industry sources are indicating that the U.S. maker, the world’s largest, and French-based PSA, Europe’s second-largest automaker by sales, are focusing on a manufacturing alliance – though some sort of joint product development could be in the cards, as well, other sources suggested.

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Such a move could be critical for GM, which is struggling to staunch ongoing losses at its German-based Opel subsidiary.  Despite hopes that its European operations would be back in the black, GM suffered a $700 million loss in 2011, raising concerns about the company’s prospects despite a record global profit of $7.6 billion for the year.

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PSA Sells off Rental Car Subsidiary

Maker shoring up against threat of new recession.

by on Nov.22, 2011

Citroen's DS5. The maker is shoring up core operations in the face of a new European economic downturn.

With the threat of a recession steadily rising, one of Europe’s leading automakers has elected to sell off its rental-cars subsidiary to raise cash.

Enterprise Holdings will purchase PSA Peugot Citroen’s Citer SA and its Spanish subsidiary Atesa to for an undisclosed sum.

Through its regional subsidiaries, Enterprise Holdings owns and operates the National Car Rental brands, as well as its flagship Enterprise Rent-A-Car brand in North America. The company also operates the Enterprise Rent-A-Car brand in the UK.  Meanwhile, with a fleet of approximately 30,000 vehicles, Citer SA has deep coverage through locations in main cities, railway stations and airports in France and Spain, two key European markets in which Citer ranks among the leading vehicle rental companies.

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PSA Peugeot Citroën emphasized the strategic opportunity that the transaction represents for Citer, which will be able to step up its development while benefiting from Enterprise Holdings’ leadership, Enterprise officials said.

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