Peugeot Plan to Buy Opel Fast Hits Potential German Hurdle

Peugeot Plan to Buy Opel Fast Hits Potential German Hurdle


If a deal is concluded successfully, an announcement regarding new French ownership of Opel and Vauxhall could be made within days, a source told Reuters reporters.

Shares in the maker of Peugeot cars, PSA, have risen by 5.5% in Paris, after reports it is set to merge with General Motors' (GM) European Opel business.

French automaker PSA Group said Tuesday, Feb. 14, 2017 it is in talks that could lead to acquisition of GM's Opel division.

PSA - the group behind Peugeot, Citroen and DS cars - already has dealings with Opel and is now supplying the GM brand with components.

A PSA spokesman confirmed that the company was in talks with the US carmaker to deepen their partnership.

In a statement, PSA said it was exploring the "potential acquisition" of the business but there were now "no assurances that an agreement will be reached".

GM Europe has been a drag on the automaker's global profitability since 1999, the past year Opel and Vauxhall recorded a net profit.

General Motors (GM) shares jumped in premarket trading Tuesday after Peugeot's parent, PSA Group, said it was in talks with the USA automaker to buy its Opel division.

GM and PSA Group formed an alliance in 2012 but in 2013 GM announced it was selling its stake. Peugeot may want to cut costs by eliminating overlapping models. For instance, the upcoming Vauxhall Grandland X - a new C-segment SUV headlining Vahxuall's SUV boom - will sit on a PSA platform.

"We are in discussions with Opel to expand upon our existing projects", Bertrand Blaise said.

A deal between the two would see PSA up its stronghold on the European vehicle market to 16 per cent, overtaking Renault to become the second biggest auto group in the region behind Volkswagen AG. He also insisted GM had a moral duty to stand by the United Kingdom workforce. In a life-saving measure, the Peugeot family was forced to sell 25.6 per cent of its stake in the French auto maker, with 12.8 per cent going to the French government and a further 12.8 per cent to Peugeot's Chinese joint venture partner Dongfeng.

For GM, offloading Opel could mean giving up on the global sales volume race in which it is now ranked third behind Volkswagen and Toyota (7203.T), with just over 10 million vehicles delivered past year.

  • Terrell Bush