BREAKING: GM Sale of Opel, Vauxhall to France's PSA Group Could Happen Within Days
Multiple media sources are reporting that an acquisition of General Motors’ European divisions by France’s PSA Group could occur within a matter of days.
Talks between GM and PSA, maker of the Peugeot, Citroën and DS brands, are reportedly at an “advanced stage.” If finalized, the deal would see GM shed the money-losing divisions it has owned for nearly a century.
Speaking to Germany’s Handelsblatt earlier this morning, a spokesperson for Peugeot claimed that the talks did not concern an expanded partnership, but rather an outright acquisition of GM’s German and British subsidiaries.
GM purchased Vauxhall in 1925 and Opel in 1929. Product alignment between Detroit and Europe tightened in past years as GM adopted global architecture. The next-generation Buick Regal, based on the Opel Insignia, is expected to be built in Germany. How the potential sale will affect products like the Regal remains to be seen.
While the two brands give GM a strong presence in Europe, Opel and Vauxhall have kneecapped GM’s finances year after year. Last profitable in 1999, the two brands were expected to turn a profit in 2016. What actually occurred was a $257 million loss.
Attributing factors included Britain’s decision to leave the European Union, which depressed the UK’s currency. PSA, on the other hand, is surging after years of decline. The French automaker, buoyed by a government bailout, Bloomberg. PSA shares climbed following the news.
GM sold its 7-percent stake in PSA in 2013, though the two companies continue to share production of SUVs and minivans.
In a statement, the American automaker downplayed expectations:
PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA.
There can be no assurance that an agreement will be reached.
[Image: General Motors]
Fred on Feb 14, 2017
This strikes me as a accounting decision. Engineering and sales were out voted. It also reminds me of their brief ownership of Lotus. Accounting saw that they were spending more money with Lotus for engineering than the company was worth. So they bought them. Then as they started to invest into the car business they realized why it was valued so low. It took them 7 years to change their minds. We have seen this before with other large manufactures as they expand their "empires" then later decide to concentrate on their "core values."
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