Opel Could Soon Be Joining Forces With PSA Peugeot Citroen

GM

A merger deal between PSA and Opel could be agreed in a matter of days.

In a surprise development, French carmaker PSA, which makes Peugeot, Citroen and DS cars, is apparently in talks about acquiring Opel from GM. A statement on the company’s website hints at the PSA’s desire to expand and improve its profitability and operations, which may include “a potential acquisition of Opel / Vauxhall” from GM, though at this stage there is no guarantee that an agreement will be met. That said, Reuters reports that a merger between PSA and Opel could be announced in a few days.

"We are in discussions with Opel to expand upon our existing projects," a PSA spokesperson told Reuters, with no further comment. This wouldn’t be the first time both companies have tried to secure a merger deal, but its last attempt was unsuccessful in 2013. Currently, both the PSA and Opel collaborate the production of various minivans and SUVs, such as the Crossland X and the upcoming Gapland X. “I can see why GM may possibly seek to sell its European division, which hasn’t made money in many years,” George Galliers, an analyst with Evercore ISI, commented. “It is less clear why Peugeot would be interested in buying GM’s assets.

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"The purchase would give them capacity in Germany, one of the most expensive countries to produce cars and would lead to excess capacity.” If successful, merging Opel with the PSA’s Citroen, Peugeot and DS would overtake Renault SA to create the second largest car manufacturer in Europe after Volkswagen. Sources say that the PSA sees the merger as an opportunity to take advantage of Opel’s engineering and electric-car technology, as well as savings from joint purchasing and cost cuts. For GM on the other hand, it would mean a clean getaway from Europe after the UK voted to leave the European Union which affected its profits.

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