PSA Group is considering buying GM's Opel Division - Insane Visions

PSA Group is considering buying GM’s Opel Division

psa group to buy opel

PSA Group, the company that currently makes Peugeot and Citroen cars, has recently started considering the acquisition of General Motors Co.’s European division, a move that could consolidate their position in the region’s automotive landscape.

According to Bloomberg, GM and PSA are currently discussing about the possible sale of Opel to the latter. Even though there’s no assurance that an agreement regarding this will be reached, there’s no doubt that this is an incredibly interesting rumor!

Bonus: Opel’s cousin from the UK

Apparently, GM is looking for a huge amount for Opel, as the deal will also include UK-based brand Vauxhall. The analysts over at Macquarie estimated that the German brand has an enterprise value of around $2.8 billion, but this shouldn’t be hard to cover for PSA Group.

“Opel is strategically a good fit for PSA, complementing its exposure to the European car market,” said one of J.P Morgan’s analysts, Jose Asumendi.

“The leap of faith in this transaction” would be the main reason for PSA to restructure Open in Germany, and there’s no doubt that this situation would be very challenging!

However, if the deal is made, PSA would become a manufacturer with around 16 percent of the European car market, surpassing Renault SA and occupying the second position in the region, after Volksvagen AG. Also, this would be the second run at linking the two companies.

It wouldn’t be the first deal between the two parts

Back in 2013, GM, which was initially controlled by Opel for almost 90 years, sold 7 percent of its business to PSA Group , after savings from a purchasing and development cooperating didn’t turn out as expected.

Currently, PSA has a market value of 16.2 billion euros, as its shares rose today by 4.3 percent, to 18.70 euros. As for GM, it jumped 5 percent this morning, in New York Trading.

Andrei

A finance and tech news journalist with a passion for entrepreneurship and business. Feel free to message me on Twitter and Facebook.