France’s PSA Group, maker of Peugeot and Citroen cars has agreed to acquire USA’s General Motor’s loss-making European brand Opel, reports Reuters, adding that an official announcement on the matter will be made on Monday,
Citing unnamed sources familiar with the matter, the report by Reuters said Group PSA’s board have approved the deal on Friday.
The value of the deal have yet to be disclosed but the PSA Group is reportedly taking on USD 10 billion in Opel’s pension liabilities. GM has initially offered to cover up to USD 2 billion of the pension liabilities but the PSA Group had asked for a significantly higher amount, in return for the new Opel brand to not compete with GM’s Chevrolet brand in China.
Opel is also known as Vauxhall in the UK. Apart from outliers like China, Opel is a predominantly European market focused brand but some Opel models like Astra and Insignia are also sold under GM’s Holden brand in Australia.
On a related matter, the PSA Group is also the sole remaining suitor for tie-ups with Proton and its subsidiary Lotus Cars. Yesterday, Bloomberg reported that China’s Geely is pulling out of negotiations with Proton, with Geely’s founder and CEO Li Shufu saying that Proton’s constant flip-flopping of directions is a source of annoyance.
Li told Bloomberg on Friday “They keep changing, today it’s this, tomorrow it’s that,” adding that Proton appears to be undecided on what it wants.