After appearing to be close to falling apart, a deal between General Motors and PSA Group for PSA to acquire GM’s European operations seems to be close. The two sides were having difficulty over the resolution of $10 billion in pension liabilities that Opel currently has as well as agreements on competing with General Motors in areas outside of Europe.
Multiple sources are now reporting that an agreement could be announced as soon as Monday. It is unclear whether or not General Motors would maintain any equity in the combined company.
Commentators have viewed consolidation the automotive sector as desirable for some time, with Fiat Chrysler’s Sergio Marchionne being among the most vocal and who had been previously rebuffed by General Motors in the past when he suggested the two firms should merge.
PSA Group’s primary brand Peugeot is the second largest European carmaker behind Volkswagen, with Opel and Vauxhall currently the fifth largest. The merged company would continue to trail Volkswagen with about a 17% market share compared to Volkswagen’s 24% in Europe. The ten largest European carmakers in the first-half of 2016 are shown below.
|5||GM (Opel / Vauxhall)||USA||6.8%|
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