Peugeot buys Opel from GM for $2.3 bn
PARIS/FRANKFURT: PSA Group has agreed to buy Opel from General Motors in a deal valuing the business at 2.2 billion euros ($2.3 billion), the companies said on Monday, creating a new regional car giant to challenge market leader Volkswagen.
The maker of Peugeot and Citroen cars vowed to return Opel and its British Vauxhall brand to profit, targeting an operating margin of 2% within three years and 6% by 2026 underpinned by 1.7 billion euros in cost savings.
PSA shares jumped 4% after CEO Carlos Tavares said GM’s European arm could be turned around using some of the lessons from the French group’s own recovery. “We’re confident that the Opel-Vauxhall turnaround will significantly accelerate.”
By acquiring Opel, PSA leapfrogs French rival Renault to become Europe’s second-ranked carmaker by sales, with a 16% market share to VW’s 24%. Last year, PSA and GM Europe recorded a combined 72 billion euros in revenue and 4.3 million vehicle deliveries.
GM will receive 1.32 billion euros for the Opel manufacturing business — 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 for Opel’s financing arm, to be operated jointly.
The sale of Opel seals GM’s exit from Europe.