Peugeot buys Vauxhall and Opel from General Motors: what happens next?

The announcement was confirmed at a press conference in Paris this morning. We intend to manage PSA and Opel/Vauxhall capitalising on their respective brand identities. Obviously, the acquisition is yet to close and is now subject to anti-trust and other regulatory approvals, but it would be safe to say it’s pretty much a done deal.

The two carmakers, which already share some production in an existing European alliance, confirmed last month they were negotiating an outright acquisition of Opel/Vauxhall, raising worries over 4,500 jobs at the unit’s United Kingdom plants at Luton and Ellesmere Port, particularly in the light of Brexit negotiations. “We see this as a natural extension of our relationship and are eager to take it to the next level”.

GMSA noted that it “continued to market, distribute, sell and service Opel vehicles in South Africa”.

News that the two companies were in talks emerged last month raising fears that the deal could lead to job losses.

Annual synergies of €1.7-billion are expected by 2026, of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround. Manufacturing, purchasing and R&D are the key areas where costs can be cut. There is also speculation that Opel will become PSA’s all-electric brand. Opel was actually slated to break even previous year, but turmoil around the United Kingdom’s Brexit meant that it lost about $257 million due to currency fluctuations.

United Kingdom business minister, Greg Clark, said that his meeting with Tavares was constructive and reassuring.

Yet Tavares remains hopeful for Opel’s plants, noting that exports could help to boost profits, as the “Brexit” vote has ushered in some new opportunities. “I was assured that the commitments to the plants would be honored”, Clark said in a statement.

“I have set out the Government’s determination to make the United Kingdom one of the world’s most attractive locations for innovative future vehicle technology, including electric vehicles and battery technology”.

“Shutting down plants is rather simplistic”. Prime Minister Theresa May has discussed the matter with French Prime Minister Bernard Cazeneuve and Carlos Tavares, the CEO of PSA Group. Of most significance to the United Kingdom is the acquisition of the Vauxhall, which employs around 4,500 staff across its plants in Ellesmere Port, Toddington and Luton.

“We have had assurances that Vauxhall is planning on continuing its operations in the United Kingdom and is committed to the plants”.

However, not all share such pessimism.