General Motors could exit Europe with $1 billion Opel sale to Peugeot


General Motors could exit Europe with $1 billion Opel sale to Peugeot

"The company carries responsibility for the sites, the development center and the securing of employment", German Economy Minister Brigitte Zypries, a Social Democrat, said in an e-mailed statement to Bloomberg on Tuesday.

Peugeot Citroen owner PSA is in discussions to buy GM's European operations, Opel, which includes Vauxhall.

Back in 2012, GM and PSA were loss-making, both having required rescuing from bankruptcy after the financial crisis and Great Recession that followed it. Peugeot's involved investments from the French state and from China's Dongfeng Automotive, which both took stakes of 13% in the company. It means the biggest auto industry merger or takeover since Fiat bought Chrysler at a knock-down price from the USA government in the wake of the global recession, and it's likely to trigger a major round of mergers and acquisitions in the vehicle world, with smaller brands vulnerable to buyout.

Detroit-based GM has accumulated more than $15 billion of losses at its Opel arm since 2000 but has held onto its European operations to allow it to develop compact cars and diesel engines.

Any deal would include Opel's United Kingdom affiliate Vauxhall, and create a carmaker with about 16% of the European market. Any renewed effort is likely to center on finding ways to cut costs - and ultimately jobs -- because the two have overlapping product offerings.

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A combination between the two would have around 16% of the European vehicle market, and would take PSA (pugoy) above its French rival Renault (rnsdf). "We like the deal, particularly from General Motors' perspective".

The negotiations revolve around full merger of operations between Opel, Vauxhall, Citroen, Peugeot and DS, and come after previous attempts to closely align the operations of the German and French auto makers.

Spokespeople for Opel and the French government, which holds 14 percent of PSA, had no immediate comment.

In 2016, Opel lost $257 million (239 million euros), forcing GM Chief Executive Mary Barra to re-think her commitment to the German carmaker made several times in recent years.



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