General Motors Co. today announced the Detroit-based automaker will sell Opel and Vauxhall to PSA Group for $2.2 billion, exiting the European market after nearly 90 years. The acquisition makes PSA the second-largest automotive company in Europe, with a 17 percent market share.
“For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum,” says Mary Barra, GM’s chairman and CEO. “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.”
The transaction includes all of Opel and Vauxhall’s automotive operations, including both brands, six assembly and five component-manufacturing facilities, one engineering center, and approximately 40,000 employees. GM will retain their engineering center in Torino, Italy. Opel and Vauxhall will continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms in the coming years.
PSA, together with BNP Paribas, will also acquire all of GM Financial’s current European platform and team. The joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA.
Barra says the transaction will allow substantial economies of scale and synergies of purchasing, manufacturing, and research and development. Annual synergies of $1.8 billion are expected by 2026, with a significant portion anticipated to be delivered by 2020, accelerating the company’s turnaround.
Similarly, Carlos Tavares, chairman of the managing board of PSA, says the company plans to capitalize on both brand’s identities moving forward.
“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” Tavares says. “We see this as a natural extension of our relationship and are eager to take it to the next level.”
GM and PSA also expect to collaborate in the further deployment of electrification technologies, and PSA might potentially source long-term supply of fuel cell systems in the GM/Honda joint venture.