Report: GM Agrees to Sell Opel and Vauxhall Brands to PSA Group
The two automakers confirmed back in February that they were discussing the possibility of an Opel deal, but according to the Reuters’ article, two unnamed sources with inside knowledge of the agreement told them that the two sides had agreed upon the deal, and that PSA’s board actually approved the move just this morning, with an official announcement expected to come on March 6th.
This reported deal would provide the PSA Group with a 16.3% share in the Europe’s small car market, making it the second largest European car company, ahead of Renault SA, but behind Volkswagen. The PSA Group also produces both Citroen and Peugeot cars.
Motor Trend has reported that the deal could be worth approximately $2 billion. In addition, the Opel acquisition could give the PSA group the chance to sell more than 5 million automobiles each year.
GM and PSA had already been working together on car development after announcing a 10-year alliance back in 2012. The two companies thought this partnership could eventually reduce costs by $2 billion per year, but the two automakers quickly decided to reduce their initial target of 40 shared projects and ended up settling on just three.
The Detroit News reported that GM has lost approximately $20 billion in the European market in the last 20 years. The publication also reported that GM didn’t think it could break even in Europe until 2018 at the earliest.
This move to sell both Opel and Vauxhall is just one example of GM’s more recent approach of not trying to sell every type of vehicle in each market, but instead focusing on its most popular products in only the most profitable markets.
Stock for GM was trading at around $38.18 a share today following the report from Reuters, which accounted for an increase of 1%.