PSA finalizes takeover of GM’s Opel, Vauxhall
General Motors Co. said Tuesday it has finalized the sale of its European brands Opel and Vauxhall to PSA Group, marking the end of nearly 90 years in the region and signaling the strongest statement yet on the company’s new profitability first strategy.
The maker of Peugeot and Citroen cars said it finalized its $2.5 billion takeover of Opel and Vauxhall, and named new management to chart an attempted turnaround plan.
GM and PSA Group announced the sale of Opel and Vauxhall in March. GM had not turned a profit in Europe since 1999 and lost billions of dollars in its effort to turn the brands and performance around. Under GM Chairman and CEO Mary Barra’s watch, the automaker has opted to leave unprofitable regions and businesses, with the Europe piece being its largest retreat to date.
“We’ve taken another bold step in our ongoing work to transform GM,” GM President Dan Ammann said in a statement. “This transaction allows us to sharply focus our resources on higher-return opportunities as we expand our technical and business leadership in the future of mobility.”
The sale of GM Financial’s European operations to PSA Group is expected to close later this year, GM said, pending regulatory approvals.
The Detroit automaker a week ago reported the European operations as discontinued in its second quarter earnings.
The French automaker in a statement Tuesday that the new executives would present the plan in 100 days. Opel’s chief said it is aiming for a return to profit in 2020 and reach a 6 percent operating profit margin by 2026, after years of losses.
The carmakers hope to save up to 1.7 billion euros annually thanks to the takeover, notably on purchasing and research and development.
PSA Chairman Carlos Tavares insisted that “Opel will remain German, and Vauxhall will remain British.”
PSA becomes Europe’s No. 2 carmaker with the closing of the deal, behind Volkswagen and has about 17 percent market share.
The Associated Press and Detroit News staff writer Melissa Burden contributed.
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