Vauxhall Takeover by PSA Group Permitted by EU To Proceed

• July 6, 2017
• By Pete Nisbet
• 0

The Vauxhall takeover by PSA Group, the French manufacturer of Citroën and Peugeot vehicles, has been permitted by the European Commission to proceed. The takeover will involve both Vauxhall and Opel vehicle manufacture. According to the European Commission, the takeover was approved “unconditionally”.  PSA was formerly known as PSA Peugeot Citroën.

GM Losses Over $15 Billion This Decade

The Vauxhall takeover deal had been announced in March, but could not proceed without EU approval. The Commission states that the takeover would not raise any “competition concerns in the relevant market”.  Vauxhall/Opel is the European division of GM (General Motors) which means that the American auto manufacturer is virtually leaving Europe.

The firm has failed to make a profit in Europe since 1999, losing $257 million (£206 million) last year. Total losses since the beginning of the decade are over $15 billion. Something had to be done.

Volkswagen Still Largest in Europe

Once the deal has been completed, Peugeot will be second only to Volkswagen in the European auto industry. The deal will enable the company to get back into the US market and to expand its UK business.  Vauxhall has 4,500 employees in its two UK plants (Luton and Ellesmere Port) and around 33,500 in several European locations. Unions have been assured that there would be no job losses as a result of the merger.

The European Commission was satisfied that the deal would not give the combined PSA-Vauxhall/Opel group an unfair commercial advantage in Europe. Viable competitors include a number of well known brands, such as Volkswagen, Renault, Fiat, Ford and some Asian competition.

PSA Group – BNP Paribas Bid for Opel Finance Arm

The EU has still to complete a review of a PSA Group /BNP Paribas bid for the Opel European finance arm.  BNP Paridas is a leading international banking and finance group based in Paris, France.  This additional deal will involve a further €900 million ($1,022).

The two companies agreed to make a joint bid for the Vauxhall/Opel captive financing business which is critical to developing Opel and Vauxhall brands.  This is to be a long-term strategic partnership offering automotive financing services.

Vauxhall Takeover Completed Last Quarter of 2017

These include leasing, consumer and dealer finance, and a range of insurance products. The Vauxhall takeover and financing deals are expected to be completed during the final quarter of this year.