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PSA and GM value Opel at 1.880 million

Automotive News

General Motors (GM) and the PSA group, owner of the Peugeot, Citroën and DS brands, are in talks to reach an economic valuation of GM’s European subsidiary, which includes the Opel and Vauxhall brands.

Sources close to the deal consulted by Bloomberg estimate that the French company would be considering disbursing 2 billion dollars (1,880 million euros) for Opel, of which 1 billion would go in cash and another 1 billion would be debt to the European subsidiary. Opel / Vauxhall has accumulated 15,000 million euros in losses since 2000. Last year, its negative result amounted to 242 million euros, a reduction of 500 million of the red numbers with respect to the previous year.

The makers acknowledged last Tuesday that they are in talks for a hypothetical purchase of Opel by PSA. Both are working, according to sources close, to outline a purchase agreement before Thursday, when the French automobile presents results of the fiscal year. However, there are other sources that ensure that automakers need more time to close this deal because of its complexity and that it may still not even close the purchase on time.

The point on which more are working towards the end of the operation is a possible reduction of costs that does not put them against the unions and the governments of each area where they operate, so that the operation is financially viable. The merger has against them that the models compete in the same market segment with similar characteristics and that the union of the factories of Opel and PSA could imply an excess of capacity for the French and lead to the closure of facilities.

In addition, a critical point is how a combined PSA / Opel car could maintain production capacity in the UK over the next decade. The expectation is that the models that are manufactured in this country will be redesigned after brexit.

Sources close to the company confirmed that PSA CEO Carlos Tavares will meet with government representatives from both the UK and France this week to clarify data on a potential acquisition of the Opel brand And Vauxhall. According to the French daily Journal du Dimanche, Tavares will meet with British Prime Minister Theresa May and other French officials, such as Economy Minister Michel Sapin. The meeting with Mr May, confirmed this weekend by the UK Government, will also presumably go to Economy Minister Greg Clark.

To further support the merger, PSA will be committed to maintaining the independence and labor agreements of Opel. In addition, it will continue to invest in existing factories at least until 2020, according to sources said. The French automaker will not carry out any forced labor regulation at least until next year, according to the German daily Bild am Sonntag.

PSA employs 184,000 workers in Europe while Opel has 34,500 employees, of whom almost half are in Germany. Despite the initial resistance, Opel unions explained last week that “we are open and prepared for future talks with PSA if the operation is to flourish.” “We want the talks to be constructive and close as soon as possible,” said Opel trade union spokesman Wolfgang Schaefer-Klug. “Our goal should be to take full advantage of the opportunities these movements provide us in order to safeguard jobs and facilities in order to create an improved and more competitive Opel / Vauxhall,” he said.

Agencias París – cinco días – 20-02-2017 (Tranlation Soft)

 

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