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Acquisition   PSA and BNP Paribas will acquire GM Financial Europe

GM sold Opel to PSA Group in €2.2 billion transaction

PSA GMGeneral Motors and PSA Group announced an agreement under which GM’s Opel/Vauxhall subsidiary and GM Financial’s European operations will join the PSA Group in a transaction valuing these activities at €1.3bn and €0.9bn, respectively.

With the addition of Opel/Vauxhall, which generated revenue of €17.7 Bn in 2016, PSA will become the second-largest automotive company in Europe, with a 17% market share.

READ MORE Brexit pushes Opel to cut staff hours in Germany

The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Annual synergies of €1.7 Bn are expected by 2026 – of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround.

Leveraging the successful partnership with GM, PSA expects Opel/Vauxhall to reach a recurring operating margin of 2% by 2020 and 6% by 2026, and to generate a positive operational free cash flow by 2020.

PSA, together with BNP Paribas, will also acquire all of GM Financial’s European operations through a newly formed 50%/50% joint venture that will retain GM Financial’s current European platform and team.

This joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA.

PSA, together with BNP Paribas, will also acquire all of GM Financial’s European operations through a newly formed 50%/50% joint venture that will retain GM Financial’s current European platform and team.

This joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA.

By immediately improving EBIT-adjusted, EBIT-adjusted margins and adjusted automotive free cash flow and de-risking the balance sheet, the transaction will enable GM to lower the cash balance requirement under its capital allocation framework by $2 Bn, which it intends to use to accelerate share repurchases, subject to market conditions.




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