PSA Group strikes £1.9 billion deal for Vauxhall and Opel

The move will see the firm, which owns Peugeot and Citroen, become the second-largest automotive company in Europe.

GM Europe has two major UK sites at Ellesmere Port and Luton, which employs around 4,500 staff.

In a statement, Carlos Tavares, chairman of the managing board of PSA, said: “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.

“We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”

It has been reported that GM Europe has not made an annual profit since 1999. Annual synergies of €1.7 billion 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.

Mary T. Barra, GM chairman and chief executive officer, said: “We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects.”