Under the €2.2bn deal, PSA – which owns Citroen and Peugeot – will acquire the Opel and Vauxhall brands, along with 12 facilities across Europe and approximately 40,000 employees. The announcement was confirmed at a press conference in Paris this morning.
Should the deal progress as planned, PSA will overtake Renault-Nissan as Europe’s second-largest auto manufacturer behind Volkswagen. Opel and Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms over the coming years.
The transaction is expected to close before the end of 2017, subject to various closing conditions. “And in my discussions with PSA, actually the chief executive has said today that Brexit isn’t an essential driver of this, and we want to have the best possible trading relationship with Europe, but in any event Carlos Tavares has said there are opportunities post-Brexit”.
“We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage”.
A joint statement issued by PSA and GM said the move will make it cheaper to develop and build future vehicles by distributing costs across five brands.The takeover could also help arrest Opel’s under-performing run, making it profitable once again. For starters, the BBC reports that the French believe the deal will result in savings of €1.7 billion (roughly $1.8 billion) per year by 2026. Manufacturing, purchasing and RD are the key areas where costs can be cut.
A sharp fall in the pound since Britain’s vote to quit the European Union last June sank Opel’s hopes of getting back into profitability in 2016, and it ended up reporting a loss of $257 million. Regarding Vauxhall, he said that regardless of the deal it would remain a “true British brand”.
Ammann and PSA Chairman Carlos Tavares repeatedly spoke of the “industrial logic” behind combining of PSA and Opel.
Ellesmere Port workers and unions worked with Vauxhall to fend off strong competition from rival German plants (with Opel closing Bochum) to win the current Astra contract and there were tough talks before the latest Luton van deal was agreed. Tavares was said to have made similar commitments to the UK’s prime minister, Theresa May, whom he had a telephone conversation last week. Of most significance to the United Kingdom is the acquisition of the Vauxhall, which employs around 4,500 staff across its plants in Ellesmere Port, Toddington and Luton.
The deal will make PSA, which already has the Peugeot and Citroen brands, Europe’s second-largest automaker behind Volkswagen.
However, not all share such pessimism.