Opel/Vauxhall join PSA Group
Establishes PSA Group as #2 in Europe. This strong and balanced
presence in its home markets will serve as the basis of profitable
venture in auto financing with BNP Paribas to support development of
• €2.2 Bn
transaction advances GM’s transformation and unlocks shareholder value
through disciplined capital allocation
Detroit and Paris, 6 March 2017 – General
Motors Co. (NYSE:GM) and PSA Group (Paris:UG) today announced an
agreement under which GM’s Opel/Vauxhall subsidiary and GM Financial’s
European operations will join the PSA Group in a transaction valuing
these activities at €1.3 Bn and €0.9 Bn, respectively.
With the addition of
Opel/Vauxhall, which generated revenue of €17.7 Bn in 2016 , PSA will
become the second-largest automotive company in Europe, with a 17%
market share .
Creates sound European foundation for PSA
to support its worldwide profitable growth
“We are proud to join
forces with Opel/Vauxhall and are deeply committed to continuing to
develop this great company and accelerating its turnaround,” said
Carlos Tavares, chairman of the Managing Board of PSA. “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 capitalizing 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
“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,” continued Mr. Tavares.
Advances GM’s Transformation and
“We are very pleased that
together, GM, our valued colleagues at Opel/Vauxhall and PSA have
created a new opportunity to enhance the long-term performance of our
respective companies by building on the success of our prior alliance”,
said Mary T. Barra, GM chairman and chief executive officer.
“For GM, this represents
another major step in the ongoing work that is driving our improved
performance and accelerating our momentum. We are reshaping our company
and delivering consistent, record results for our owners through
disciplined capital allocation to our higher-return investments in our
core automotive business and in new technologies that are enabling us
to lead the future of personal mobility.
“We believe this new chapter
puts Opel and Vauxhall in an even stronger position for the long term
and we look forward to our participation in the future success and
strong value-creation potential of PSA through our economic interest
and continued collaboration on current and exciting new projects,” Ms.
Strengthens Each Company for the
The transaction will allow
substantial economies of scale and synergies in purchasing,
manufacturing and R&D. Annual synergies of €1.7 Bn are expected by
2026 – of which a significant part is expected to be delivered by 2020,
accelerating Opel/Vauxhall’s turnaround. Leveraging the successful
partnership with GM, PSA expects Opel/Vauxhall to reach a recurring
operating margin of 2% by 2020 and 6% by 2026, and to generate a
positive operational free cash flow by 2020.
PSA, together with BNP
Paribas, will also acquire all of GM Financial’s European operations
through a newly formed 50%/50% joint venture that will retain GM
Financial’s current European platform and team. This joint venture will
be fully consolidated by BNP Paribas and accounted under the equity
method by PSA.
The transaction is another
step in GM’s ongoing work to transform the company, which has delivered
three years of record performance and a strong 2017 outlook, and
returned significant capital to shareholders. It will strengthen GM’s
core business, support its continued deployment of resources to
higher-return opportunities including in advanced technologies driving
the future, and unlock significant value for shareholders.
By immediately improving
EBIT-adjusted, EBIT-adjusted margins and adjusted automotive free cash
flow and de-risking the balance sheet, the transaction will enable GM
to lower the cash balance requirement under its capital allocation
framework by $2 Bn, which it intends to use to accelerate share
repurchases, subject to market conditions.
GM will also participate in
the future success of the combined entity through its ownership of
warrants to purchase shares of PSA. GM and PSA also expect to
collaborate in the further deployment of electrification technologies
and existing supply agreements for Holden and certain Buick models will
continue, and PSA may potentially source long-term supply of fuel cell
systems from the GM/Honda joint venture.
Groupe PSA today announces
the closing of the acquisition of GM subsidiaries Opel and Vauxhall, a
project that was signed on 6 March 2017.
With Opel and Vauxhall, Groupe PSA becomes the second largest European
car manufacturer, with a market share of 17% in the first half.
Building on this transaction and now with five complementary,
well-positioned car brands, Groupe PSA will strengthen its presence in
the major European markets and this will serve as a foundation for
profitable growth worldwide.
From 1 August 2017, Opel and Vauxhall are committed to building a
strategic plan with Groupe PSA’s support, aimed at re-establishing
economic fundamentals. The Opel and Vauxhall teams will present this
plan in 100 days and will ensure its execution, boosted by synergies
generated by the new Group, estimated to circa 1.7 billion euros per
year in the mid term.
The closing of this transaction marks a major step in Groupe PSA's
development, which it has been possible to take thanks to the strong
commitment of the teams involved. The Supervisory Board would like to
thank Chairman Carlos Tavares and CFO Jean Baptiste de Chatillon for
their key role in this transaction as part of the Managing Board. With
regard to the challenges facing Groupe PSA, it considers it necessary
to incentive them on the implementation of the Opel recovery plan,
under conditions to be specified at a later date.
In parallel, the acquisition of GM Financial's European operations is
under way, subject to validation by the different regulatory
authorities and is planned for the second half of 2017.
Carlos Tavares, Chairman of the Managing Board of Groupe PSA, comments:
“We are embarking today with Opel and Vauxhall on a new stage in Groupe
PSA's development. This project became a reality with a few months
only, thanks to the outstanding work of the teams and I want to thank
them warmly. We will grasp this opportunity to build on one another's
strengths and to attract new customers, thanks to the implementation of
the performance plan that Opel and Vauxhall will implement. In
parallel, the execution of the Push to Pass plan remains a top priority
for the teams, they are focused on achieving the objectives. We have
confidence in the momentum that these strategies will create, to the
benefit of all stakeholders.”