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PSA agrees £1.9bn deal to buy Vauxhall and Opel from General Motors

Monday 06 March 2017, By Autovolo

PSA agrees £1.9bn deal to buy Vauxhall and Opel from General Motors

PSA agrees £1.9bn deal to buy Vauxhall and Opel from General Motors

PSA Group, parent company of Citroen, Peugeot and DS, has secured a deal to purchase the European arm of General Motors for £1.9bn.

The arrangement throws the future of 4,500 workers at GM’s UK Vauxhall plants in to the balance. However, the total number of employees in the UK including dealerships and supply chain is around 35,000.

Despite generating a revenue of £15.3bn in 2016, GM Europe hasn’t made a profit for more than 15 years.

The deal will see PSA Group become Europe’s second-largest car manufacturer, taking up a 17 per cent market share.

The chairman of PSA’s managing board, Carlos Tavares, said that he expects the businesses’ performance to accelerate with their support, suggesting they intend to keep the brands in their current guises.

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

“We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall by capitalising 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.”

Tavares added: “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.”

The addition of Vauxhall and Opel will bring PSA’s share of the European new car market to 16 per cent.