The acquisition of Opel and Vauxhall by France’s PSA Group from General Motors is complete, according a joint statement released by both companies today. The €2.2 billion deal also sees PSA take over GM Financial’s European operations.
With Opel/Vauxhall now in its fold, the PSA Group immediately expands to become the second-largest automotive company in Europe, with a market share of 17%, behind the Volkswagen Group.
Despite being often reported as a struggling brand, Opel/Vauxhall was good for €17.7 billion of revenue in 2016. The combined brands were valued at €1.3 for the transaction and are now wholly owned by PSA.
“We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level,” said Carlos Tavares, Chairman of the PSA Group’s Managing Board.
The other aspect of the deal, valued at €0.9 billion, sees PSA and BNP Paribas join forces to acquire the financing arm of Opel and Vauxhall, an operation which covers 11 European countries. The PSA Group and BNP Paribas will each hold 50 percent of the venture.
Looking ahead, PSA is targeting to get Opel/Vauxhall profitable by 2020 with 2% operating margin; the company targets to hit 6% by 2026.
“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,” Tavares continued.
GM, meanwhile, is not being cast out of the picture entirely. The American company holds warrants for future purchase of PSA Group shares. The two companies also reaffirm their commitment to further collaboration in electrification technologies as well as existing supply agreements involving Holden and certain Buick models.
“We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects,” said Mary T. Barra, Chairman and Chief Executive Officer of GM.
Separately, the PSA Group is also reported to be in the midst of pursuing a 51% stake acquisition of Proton. A report by Automotive News Europe quotes a PSA spokesperson as saying the company had “made an offer and is willing to go further.”