Home CitroŽnŽt home
Site search powered by FreeFind Do NOT include 'Citroen' in your search terms

PRESS Release

psagroupe.jpg

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 growth worldwide

•    Joint venture in auto financing with BNP Paribas to support development of Opel/Vauxhall brands

•    €2.2 Bn transaction advances GM’s transformation and unlocks shareholder value through disciplined capital allocation


gm.jpg

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 level.”

“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 Unlocks Value

“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. Barra concluded.

Strengthens Each Company for the Long Term

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.”

For additional information contact PSA Groupe/GM


© 2017 CitroŽnŽt