PSA Group has revealed that it will be acquiring General Motor’s Opel and will be placing it under its Peugeot brand.
Europe always has had an upper hand in the global market as a hub in car production ranging from affordable to luxury cars. The deal between two automobile giants, which could be inked as early as tomorrow, will make the European automobile sector even bigger. The deal will be signed between the PSA Group and General Motors Co with PSA Group’s Peugeot acquiring Opel. With this deal, the French group PSA will become the second largest automaker in Europe after Volkswagen leaving behind another automobile giant Renault.
Since General Motors’ European market scenario hasn’t been great with losses in consecutive 16th year, the deal wasn’t a surprise. Another part of the discussion between PSA and GM included the pension deficit amounted to $10 billion that Opel faces under GM, for which Peugeot will take steps to get over it post-acquisition.
With this deal, comes the threat of job cuts and to answer this concern PSA executives have been in touch with the labour unions. The concerned ones are assured the security of the production sites thus securing the jobs of workers. This is the only threat seen as the outcome of the deal and thus PSA is backing the concern to resolve it thus widening the way for a smooth acquisition.
According the PSA group CEO Carlos Tavares, the purchase of Opel lands an opportunity to become a giant in Europe and eyes 5 million annual vehicle sales. In his message to the board, he encourages them with asserting about the redevelopment of Opel’s production line with their own latest existing technologies which will generate revenue from savings of about whopping $ 2.1 billion.
Under General Motors’, Opel sales were limited to its home region, and now with Peugeot taking it over, company envisages its substantial share in the global market/