Final details on carrying across and combining the companies' financial arms, Opel Bank, Opel Financial Services and Vauxhall Finance, with collaboration from financial giant BNP Paribas. The newly acquired financing company of Vauxhall and Opel will sit alongside the existing PSA Financing arm, Banque PSA Finance. Around £8.4billion of finance was tied up in the Vauxhall and Opel financing companies at the end of last year.
The £1.9bn deal consists of GM’s Opel/Vauxhall subsidiary and GM Financial’s European operation, valued at £1.2bn and £800m respectively.
The move, which was first announced in March, makes PSA the second-biggest-selling car group in Europe after Volkswagen. Enlarged PSA now has a 17% share of the European market.
Following the announcement this morning, PSA said it will present a detailed business plan for Vauxhall and Opel in early November and added that the intention was to return to the two brands to profit. Last year, they lost £200m. In a statement, PSA said its intention for Vauxhall and Opel was to "generate a positive operational free cash flow by 2020 as well as an operating margin of 2% by 2020 and 6% by 2026". Four PSA executives will join the Opel leadership team, which is led by chief executive Michael Lohscheller.
There is no word on the future of Vauxhall's two UK factories in Luton and Ellesmere Port. A Vauxhall spokesman told Autocar it was "business as usual" at the moment.
PSA Group boss Carlos Tavares said: “We are witnessing the birth of a true European champion today. We will assist Opel and Vauxhall’s return to profitability and aim to set new industry benchmarks together. We will unleash the power of these iconic brands and the huge potential of its existing talents. Opel will remain German, Vauxhall will remain British. They are the perfect fit to our existing portfolio of French brands."
Lohscheller said Opel is "eager to build the [business] plan with PSA’s support", and added that the economies of scale and synergies in purchasing, manufacturing and R&D could help the new group to save an estimated £1.5bn each year.
A much leaner management structure will be implemented, said Lohscheller: "We are reducing complexity and increasing spreed. I am looking forward to shaping the next chapter of Opel/Vauxhall with the new management team and leading our company into a successful future. The owners and the employees will not be the only ones to benefit from ever stronger Opel and Vauxhall brands – our customers will do so too.”
This confirmation follows the announcement last month that the European Union's antitrust authority “unconditionally approved” PSA’s plans to buy Opel and Vauxhall, concluding that “the transaction would raise no competition concerns”.
The PSA Group sold 3.5m cars globally last year and Vauxhall/Opel sold 1m.
PSA has previously said the decision allowed it to support worldwide profitable growth, while General Motors, current owners of the Vauxhall/Opel brands, said it "advances GM’s transformation and unlocks shareholder value through disciplined capital allocation".
In a press release confirming the purchase in March, PSA Group boss Carlos Tavares said PSA would respect existing brand identities and "help accelerate [Opel's] turnaround", referring to its recent struggles; last year, it lost £200m.
"We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround. We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”