PSA purchased Opel from General Motors for $2.3 billion

Last Updated: December 19, 2019By Tags: , , , , ,

PSA group from France announced officially today purchase of Opel from General Motors for $2.3 billion. Goal of the new European giant who became ranked second Europe’s automaker by sales, is to reverse many years loss into a profit by using the model of its own recovery. “We’re confident that the Opel-Vauxhall turnaround will significantly accelerate with our support,” said Chief Executive Carlos Taveras. Confirmation of his statement to make the Opel and its British brand Vauxhall profitable, was the jump of the PSA shares for 5.2 %.

GM will receive 1.32 billion euros for the Opel manufacturing business in the form of 650 million euros in cash and 670 million in PSA share warrants. An additional 900 million euros will be paid by the Paris-based carmaker and BNP Paribas (BNPP.PA) for Opel’s financing arm, to be operated jointly and consolidated by the French bank.

An ambitious technical convergence push will begin with the Opel Corsa

Tavares said on Monday the targeted savings would come from purchasing and research and development – avoiding plant closures – as the Opel lineup is redeveloped with PSA technology and vehicle architectures. An ambitious technical convergence push will begin with the Opel Corsa. The next version of the popular subcompact will be delayed by a year to 2020 as it goes back to the drawing board, according to presentation slides shown to analysts.

“Our planning teams are already working on that,” Tavares said when questioned about the model. Another five PSA-based Opel vehicles will follow by 2023.

Existing Opel models will be barred from entering new overseas markets under “non-compete” agreements that had also complicated negotiations – while GM will be similarly excluded from marketing the same underlying technologies in Europe.

The PSA warrants, exercisable in five years and maturing in nine, provide a financial incentive for GM to continue cooperating. The U.S. carmaker has agreed to sell the shares received upon exercise, keeping no stake in PSA.

The Opel sale cuts GM’s cash balance requirement by $2 billion, the company said, allowing it to accelerate share repurchases. GM will also take a charge of $4 billion to $4.5 billion on the deal, expected to close in late 2017.

Share This Story, Choose Your Platform!

editor's pick

news via inbox

Nulla turp dis cursus. Integer liberos  euismod pretium faucibua