Report: PSA close to deal to acquire Opel

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Thread: Report: PSA close to deal to acquire Opel

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    GMI Staff Member Premium Member nadepalma's Avatar
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    Report: PSA close to deal to acquire Opel

    PSA close to deal to acquire GM's Opel unit, reports say
    March 2, 2017
    From wire reports via AutoNews.com

    PSA Group is closing in on a deal to acquire General Motors' Opel unit to create Europe’s second-largest automaker, with an agreement possibly coming early next week, sources told Bloomberg and Reuters.

    Both companies are planning to continue intense negotiations through the weekend with the aim of announcing a deal on Monday, Bloomberg reported on Thursday, quoting people familiar with the situation. The complexity of talks could lead to a delay, the people said.

    The two automakers are said to be narrowing differences over pension liabilities, Reuters reported. GM’s pension plan for Opel and Vauxhall retirees is underfunded by about $9 billion, according to Bloomberg. PSA would like GM to keep a big chunk of that responsibility, sources said.

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    GMI Staff Member Premium Member nadepalma's Avatar
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    Re: Report: PSA close to deal to acquire Opel

    Quote Originally Posted by Automotive News
    The talks appeared to reach an impasse this week as GM demanded restrictions on Opel sales in China in return for covering part of the pensions hole, people with knowledge of the matter said. GM had also sought to limit its pensions contribution to $1-2 billion, one said.

    Analysts including Alexis Albert at Barclays put GM's European pensions deficit between $8 billion and $10 billion, with Opel's German operations accounting for the lion's share and the British Vauxhall unit for $1.1 billion.
    Quote Originally Posted by Automotive News
    The carmakers have since narrowed the gap on pensions and the so-called "non-compete" agreements sought by GM, sources said, although it remains unclear how or whether they have been resolved.

    "We are making progress every day," said another Paris-based source.

    In his public comments on Feb. 23, PSA's Tavares said he saw export potential for the Opel brand under PSA ownership. However, much of the existing Opel lineup would remain dependent for years on technology and parts shared with other GM brands.

    GM has been pressing for a deal barring those legacy Opel models from markets including China, Russia and Latin America, sources have said.

    Tavares also told his board that PSA would rapidly redevelop the core Opel lineup with its own technologies to achieve swift cost savings, sources told Reuters last week.
    So it seems they still have things to work out, but the sentiment is that a deal has to get done. I don't see either side walking away; even over some of these issues.
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    Re: Report: PSA close to deal to acquire Opel

    It's clearly a complex deal, inevitably, so it's good that serious talks are continuing.

    It'll be great to hear it's a done deal and get the past behind them - it'll also be good to hear what PSA's plans are, although that's bound to include good and bad news.

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    Re: Report: PSA close to deal to acquire Opel

    GM seem to like trying to brush responsibility for things they owe money to.

    Plain and simple they were supposed to fund this so PSA should push hard for as much as they can.

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    Re: Report: PSA close to deal to acquire Opel

    Quote Originally Posted by Rick_VT View Post
    GM seem to like trying to brush responsibility for things they owe money to.

    Plain and simple they were supposed to fund this so PSA should push hard for as much as they can.
    It's all part of the deal. I doubt they would get Opel and all the tech they're getting for 2 Billion if the pension had the balance it needs to have. 2 Billion is very very cheap for what they're getting.

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    Re: Report: PSA close to deal to acquire Opel

    Quote Originally Posted by Rick_VT View Post
    GM seem to like trying to brush responsibility for things they owe money to.

    Plain and simple they were supposed to fund this so PSA should push hard for as much as they can.
    It is not at all that plain and simple. To the contrary, it is common for the retirees of a divested entity to become the former employees of the new owners rather than former employees of the old owners. Obviously, PSA wants a purchase contract that is most favorable to PSA and its stakeholders. General Motors wants a contract that is most favorable to GM and its stakeholders. Neither company will get everything that it wants. What each gets will be compromises developed during negotiations.

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    Re: Report: PSA close to deal to acquire Opel

    What does this mean for the new Regal in America and Commodore in AUS?
    shout out 2 america...

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    Re: Report: PSA close to deal to acquire Opel

    Quote Originally Posted by babyfacedkayos View Post
    What does this mean for the new Regal in America and Commodore in AUS?
    The existing deal for Opel to build Commodore will likely be part of the negotiations so we can only guess at this stage - my guess is that it would suit both PSA and GM to keep that deal in place but it may change whatever flexibility/inflexibility Holden had on it's buying in price.

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    Re: Report: PSA close to deal to acquire Opel

    Sounds like the deal is getting closer. Opel decided to show the Crossland X at the Geneva motor show at the last minute, stressing that it is a good example of PSA and Opel working together.

    "As the first car to be launched out of the PSA-Opel cooperation, the Crossland X is a convincing statement of how the fruitful collaboration between the two brands has resulted in a great product," Opel said.

    Reading between the lines, it looks like they are getting ever closer.

    LINK

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    Re: Report: PSA close to deal to acquire Opel

    Tavares also told his board that PSA would rapidly redevelop the core Opel lineup with
    its own technologies to achieve swift cost savings, sources told Reuters last week.
    Goes to the heart of the problem and pretty much gives us a window into why GM's IP probably won't matter much..
    PSA looking at Opel and Vauxhall as new sales channels for it existing products suitably modified for Germany and UK,
    a couple of big markets that PSA would love to maximize sales....

    It's embarrassing to think that in a few short years, PSA will achieve what was impossible for GM,
    to run a profitable European division that adds value and profit to it corporate business...

    but i'm getting ahead of things, GM still has to "gift" Opel Vauxhall to PSA and eat the pension costs.
    Last edited by jpd80; 03-03-2017 at 06:27 AM.

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    Re: Report: PSA close to deal to acquire Opel

    Quote Originally Posted by jpd80 View Post
    Goes to the heart of the problem and pretty much gives us a window into why GM's IP probably won't matter much..
    PSA looking at Opel and Vauxhall as new sales channels for it existing products suitably modified for Germany and UK,
    a couple of big markets that PSA would love to maximize sales....

    It's embarrassing to think that in a few short years, PSA will achieve what was impossible for GM,
    to run a profitable European division that adds value and profit to it corporate business...

    but i'm getting ahead of things, GM still has to "gift" Opel Vauxhall to PSA and eat the pension costs.
    I'd love to be a "fly-on-the-wall" and hear their plans, model by model.

    My crystal ball suggests:-

    Adam, Corsa, Astra and Insignia continue to their natural replacement point and then get all-new replacements with PSA platforms and powertrains - maybe switching to PSA powertrains at their mid-term facelifts.

    Karl/Viva continued to be bought in from GM Korea but eventually replaced with PSA based/built models

    Crossland and Grandland introduced as planned - already PSA-based/built

    Mokka, Meriva, Zafira and VXR8 dropped this year - Meriva/Zafira/VXR8 as planned and Mokka as superfluous and competes with Crossland

    Cascada - only retain it if it's profitable in it's own right but discontinue it anyway when Astra is replaced.

    Combo - replaced asap with a PSA based "car-derived-van" as it's a rebaged Fiat

    Vivaro and Movano - replaced asap with PSA based panel vans as they're rebadged Renaults.

    Antara - presumably about to be dropped as there is allegedly a flagship SUV "coming" which might fit Peugeot/Citroen ranges as well as Opel/Vauxhall so could be the way for GM to retain an interest in PSA-Opel/Vauxhall.

    The big intrigue is how they'll structure the brands.
    Last edited by Ruperts Trooper; 03-03-2017 at 07:46 AM.

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    Re: Report: PSA close to deal to acquire Opel

    Quote Originally Posted by Ruperts Trooper View Post
    ...
    The big intrigue is how they'll structure the brands.
    That's the big question. Maybe we get more infos at the Geneva press conference on March 7.

    For those who are interested, here is a link to the press release including the YouTube livestream: http://media.opel.com/media/intl/en/...ivestream.html

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    Re: Report: PSA close to deal to acquire Opel

    This deal is unlikely to happen, I do not see how GM comes out on top if they are not free from Pension Liabilities.

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    Re: Report: PSA close to deal to acquire Opel

    Quote Originally Posted by mbukukanyau View Post
    This deal is unlikely to happen, I do not see how GM comes out on top if they are not free from Pension Liabilities.
    They currently have those pension liabilities - the only way to get free of them is to do a deal with PSA.

    It's not about GM coming out on top - it's about GM getting out of Europe with no liabilities.

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    Re: Report: PSA close to deal to acquire Opel

    It's too bad we won't ever see the Opel Adam in the US, not as a GM vehicle at least. Mini Cooper ran its course and the 500 is a dud. Adam looked like a good option.

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