BREAKING: PEUGEOT BUYS OPEL

BREAKING: French group PSA has bought the Opel business (including the UK’s Vauxhall brand) from General Motors. PSA owns Peugeot, Citroen and DS. The addition of Opel, which is based in Germany and has been in the hands of GM for about 90 years, will propel PSA into the second spot in Europe with a 17% market share. The transaction is valued at €2.2 billion (about R30.4 billion).

Mary Barra, GM Chairman and CEO.

“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 capitalizing 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. “For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.”

PSA, together with BNP Paribas, will also acquire all of GM Financial’s European operations through a newly formed 50%/50% joint venture that will retain GM Financial’s current European platform and team. This joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA.

 

Product synergies (and competition) will be quite intense come the next two or three years as Peugeot and Opel roll out similar products. It may happen that several of these will be culled in order not to cannibalise on the new joint company’s success. Such products include the new Peugeot 3008, and 2008, Opel Crossland X and Grandland X. Both these are expected to land in Mzansi over the next 12 months. Citroen pulled out of the country at the end of 2016 and will therefore not introduce any new products locally going forward.

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