GM’s Opel to possibly merge with PSA Peugeot-Citroen

Reports are breaking in France that say that General Motor’s European division Opel (and Vauxhall) could be negotiating a merger with PSA’s Peugeot Citroen auto. One story is that GM could be investing up to €6.25bn. and increase their stake from 6 to 30 per cent of PSA. The investment in the new joint-venture company would go in to future product development of important volume models such as the next new Opel Astra share a platform with Peugeot 308 and Citroen C4 models from 2015. They would use a shared platform to save costs.

If this deal were to happen, it could be a stand-alone company with GM paying to move Opel and Vauxhall off their books. GM Europe is forecast to loose over a €1bn this year and PSA could nearly double that.

Another report has GM buying PSA’s auto division, while yet another has GM selling Opel (and Vauxhall) to PSA. There is even talk of PSA being a 70 per cent major shareholder in a new merger with Opel/Vauxhall. That repot has the French Government reluctantly funding that deal.

Leaving aside sales or mergers, what we already know is the current alliance between PSA and General Motors in Europe includes the next generation Opel Insignia, Citroen C5/ Peugeot 508, as well developing a new budget line of models, a la Dacia.

Our best guess is both the French Government and General Motors funding some structure of a joint-venture that will be expected to achieve dividends in four or five years time and turbulent times in the interim. Chevrolet will not be part of any JV.

Watch this space in the next few months for which deal (if any) will happen?