Peugeot poised to buy GM's Opel, creating European car giant

Sat Mar 4, 2017 7:33am EST
 
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By Laurence Frost, Gilles Guillaume and Pamela Barbaglia

PARIS/LONDON (Reuters) - France's PSA Group (PEUP.PA: Quote) is set to announce a deal to buy Opel from General Motors (GM.N: Quote) on Monday after striking an agreement with the U.S. carmaker and winning the blessing of its board for the acquisition.

The maker of Peugeot, Citroen and DS cars said on Saturday it would hold an early Monday press conference with GM, at which the transaction is expected to be presented after Reuters reported that a deal had been struck between the two automakers.

By acquiring Opel, the French group will leapfrog rival Renault (RENA.PA: Quote) to become Europe's second-ranked carmaker after Volkswagen (VOWG_p.DE: Quote) by market share. Between them, PSA and GM Europe recorded 71.6 billion euros ($76 billion) in revenue and 4.3 million vehicle deliveries last year.

The tie-up was approved on Friday by the PSA supervisory board, on which the French government, Peugeot family and China's Dongfeng (0489.HK: Quote) are represented as shareholders, one source with knowledge of the matter said.

Spokespeople for PSA and Opel declined further comment.

The two carmakers, which already share some production in an existing European alliance, confirmed last month they were negotiating an outright acquisition of Opel and its British Vauxhall brand by Paris-based PSA, sparking widespread concern over possible job cuts.

In their jointly issued invitation to a Paris press conference at 0815 GMT on Monday, PSA and GM gave no indication of its subject. Separate briefings for the German press and Opel unions are expected to be held the same day.

Sources close to the talks had reported progress on Thursday after the carmakers narrowed differences on a near-$10 billion Opel pension deficit and other issues. GM's European arm recently posted a 16th consecutive year of losses.   Continued...

 
FILE PHOTO: A combination picture shows the logos of Opel and Peugeot car manufacturers at dealerships of the brands in Strasbourg, France, February 14, 2017. REUTERS/Vincent Kessler/File Photo