General Motor’s is weighing its options to improve its situation in Europe, and one of them is potentially selling off its European Opel and Vauxhall brands to France’s PSA Group.
The American automaker has confirmed that it has been in talks with PSA Peugeot Citroen to unload its Opel and Vauxhall divisions, but nothing has been finalized. A company presser stated:
“PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA.”
GM added that “there can be no assurance that an agreement will be reached,” indicating that Opel and Vauxhall could remain under its umbrella.
GM and PSA entered into a partnership in 2012 when the former acquired a 7 percent stake in the latter for approximately $400 million. It was expected that the partnership would lead to $2 billion in purchasing an join development synergies annually, but those expectations were not met.
Although Opel and Vauxhall have been two of the weakest members of GM’s family, they have performed relatively well in recent months (they lost $300 million in Europe in 2016, an improvement over the $800 million loss recorded in 2015). And the fact that the Chevrolet brand is no longer a player in Europe means the company will be for all intents and purposes exiting the European market altogether if it sells off the division.
I am as surprised as you probably are at this development. Would it be smart for General Motors to sell off Opel and Vauxhall to PSA Peugeot Citroen? Share your thoughts in the comments below.