The buyout makes PSA, owner of Peugeot and Citroen cars, the second-largest car maker in Europe
We have been hearing it for months now and it seems like the deal has finally gone through. French car major and owner of brands like Peugeot and Citroen - PSA finally agreed to buy the Opel brand from General Motors. PSA purchased the European sub-division of the General Motors at €2.2 billion. GM operated under Vauxhall in UK and Opel in Europe but following this deal, the company will be will cut off from the European region. As per the deal, Germany-based Opel and UK moniker Vauxhall, have been acquired.
Certain reports suggest that Opel has not been able to bring profits for General Motors for more than 15 years. In fact, over the last 7 years, the company has suffered losses of more than $8 billion. GM has owned Opel for almost 90 years but now cuts off from the brand after it failed to meet equilibrium last year.
Meanwhile, PSA has been positive about their new acquisition. The French company believes that Opel’s sales of roughly 1.2 million annually is sure to help them in spreading costs of development of new vehicles across a wider area. Meanwhile, Opel’s supply to its Australian Holden unit and Buick will continue with certain models. The two firms are also rumoured to have some mutual understanding with regard to fuel cell systems.
This deal strengthens PSA’s presence in Europe making it the second largest car maker in the region after Volkswagen. Subsequent to the deal, PSA is expected to have a market share of 16 percent in Europe with Volkswagen leading the charts at 24 percent.
In the interim, the atmosphere is tense within Opel with whispers of potential job cuts and severe restructuring of some of the employees. That being said, PSA has said they will respect all existing labour agreements.