 have agreed to buy General Motors' European business, including the Vauxhall and Opel brands, in a deal worth 2.2 billion euros.){kind=link}
Peugeot owner PSA (EPA:UG) have agreed to buy General Motors’ European business, including the Vauxhall and Opel brands, in a deal worth 2.2 billion euros.
The Paris-based group, who currently manufacture Peugeot and Citroen brands, will now be the second-largest automotive business in Europe. In a statement, the company said they would endeavour to enlarge their 17 percent market share by “capitalising on their respective brand identities”.
PSA gave no comment on whether jobs would be lost in either the UK or Germany, where Vauxhall and Opel employ thousands of workers. The company did say that they expected to achieve annual cost savings of around £1.5 billion by 2026.
In a statement, Carlos Tavares, chairman of PSA’s managing board, said: “We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround.
“We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage.
“We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”
The announcement of the deal comes after speculation heated up last week, in the wake of strong trading results for PSA Group.
Net income at PSA Group rose 92 percent over the last year to 1.73 billion euros, with recurring operating income rising to 3.24 billion euros. This includes a loss of 280 million euros from currency swings in the wake of Brexit. The company also announced plans for a 48 euro cents dividend per share.
The strong results increased the intensity of discussions between PSA, who own Peugeot and Citroen, and General Motors. The chairman of PSA Group had spoken previously of his desire to create a “European car champion” through a purchase of General Motors’ European car business, who own Opel and Vauxhall.
Shares in Peugeot (EPA:UG) were trading up 3.86 percent to 19.80 by 08.21GMT, with shares in General Motors (NYSE:GM) also up 1.24 percent.