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Holden ‘not affected’ as PSA buys Opel, Vauxhall

Seal of approval: Another step has been taken towards PSA Group’s acquisition of GM’s European brands, Opel and Vauxhall, with the sale signed off by EU antitrust authorities.

Peugeot, Citroen, DS parent PSA Group purchases GM’s Euro brands in $2b-plus deal

Peugeot logo7 Mar 2017

By DANIEL GARDNER

FRANCE’S PSA Group has agreed to buy General Motors’ European brands Opel and Vauxhall for €1.3 billion ($A1.8b) and €0.9 billion ($A1.3b) respectively, with the landmark transaction due to be completed in the final quarter of this year.

With significant European brands Peugeot, Citroen and DS joining forces with the two new marques, the deal will elevate PSA to Europe’s second-largest auto conglomerate and a 17 per cent market share, behind the European giant Volkswagen Group.

Sourcing vehicles from the European Opel pool is a significant part of Australian GM brand Holden’s strategy as it transitions into a full-line importer this year, but the Australian subsidiary said this week that its current product programs are not affected.

“Holden and Opel have had close ties for many years and delivered fantastic vehicles to Australian customers, including the current all-new Astra and the next-generation Commodore due in 2018,” Holden said in a statement. “The good news is these product programs are not affected at all.” It will be business as usual, according to Holden, with plans for the progressive introduction of more European-sourced cars unchanged – at least in the foreseeable future.

“We will continue to work closely with Opel and GM to deliver our vehicle plans with excellence and precision. This includes future, new right-hand-drive SUVs like the Equinox and Acadia that were engineered specifically for right-hand drive markets,” the company said.

While GM hands over its mainstream brands Opel and Vauxhall, reports suggest that it will retain a luxury presence in Europe, continuing to battle sports and luxury brands with its Cadillac range as well as the Chevrolet Camaro and Corvette sports models.

US publication Automotive News said General Motors president and CEO Mary Barra confirmed overnight that the company would retain the high-end brands in Europe.

“That is the plan at this time, to continue with those models and brands in Europe,” she said. “We continue to grow the Cadillac brand. We’ll continue to do that in a very disciplined fashion.” PSA chairman Carlos Tavares said the sale of Opel and Vauxhall to PSA provides solid foundations for the company to continue to grow locally and internationally.

“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” he said.

“We welcome all that has been done by its talented teams and the beautiful Opel and Vauxhall brands and the exceptional heritage of the company. We intend to manage PSA and Opel/Vauxhall capitalising on their brand identities.

“Having already jointly developed excellent models for the European market, we are confident that Opel/Vauxhall is the right partner. This is for us a natural extension of our partnership, and we look forward to moving to the next level.” Mr Tavares’ enthusiasm for the deal was echoed by Ms Barra.

“We are pleased to have together, we GM, our colleagues of Opel/Vauxhall and PSA, a new opportunity to increase the long-term performance of our companies relying on the success of our alliance,” she said.

“For GM, this is another major step in the currently deployed plan to improve our performance and accelerate our momentum. We are transforming our company and reaching record and lasting results for our shareholders through disciplined allocation of our resources in favour of the most profitable investments in our heart of automotive business and in new technologies that allow us to define the future of individual mobility.” Ms Barra explained that the two companies would continue to work together on existing collaborative projects as well as future ventures for new products.

“We are confident that this new chapter will further strengthen Opel and Vauxhall in the long term and we look forward to contributing to the future success and PSA value creation potential through our common economic interests and an ongoing collaboration on existing projects but also on other exciting projects to come,” she said.

As part of the deal, GM’s European financial operations will be taken over by a new joint venture between PSA and international banking group BNP Paribas, with each company holding a 50 per cent stake.

With its bolstered empire, PSA says the new arrangement will allow it to upscale operations in purchasing, production and R&D, while the company forecasts “synergies” of €1.7b ($A2.4b) by 2026 – with a majority of that figure realised by 2020.

Opel/Vauxhall operating margins will reach 2.0 per cent by 2020 before climbing to 6.0 per cent in 2026, the company said.

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