PSA to Buy GM’s European Operations in Deal Valued at EU2.2b
Owner of Peugeot and Citroen car brands agrees to buy GM’s Opel/Vauxhall subsidiary valued at EU1.3b, and GM Financial’s European operations valued at EU0.9b, PSA and GM say in statement.
- PSA to acquire GM Financial business in joint-venture with BNP Paribas
- PSA sees annual synergies of EU1.7b by 2026, “significant part” to be reached by 2020
- Opel-Vauxhall to reach recurring operating margin of 2% by 2020 and 6% by 2026, to generate positive operational free cash flow by 2020
- Deal allows GM to lower cash balance requirement under its capital allocation framework by $2b, plans to use that to accelerate share purchases
- GM to buy warrants to buy shares in PSA
- GM will take a primarily non-cash special charge of $4.0b-$4.5b
- Deal expected to close before year-end
- Makes PSA second-biggest European carmaker with 17% market share
- Opel-Vauxhall had revenue of EU17.7b in 2016