General Motors Company (NYSE:GM) is selling Opel and Vauxhall to PSA Group as part of a $2.3 billion deal
The deal will have General Motors Company selling Opel and Vauxhall to PSA Group for roughly $1.38 billion. The deal will also include GM Financial’s European operations. The value for this part of the deal is set at $954 million.
Opel and Vauxhall reported revenue of $18.75 billion during 2016. Once General Motors Company sells its two subsidiaries to PSA Group, the latter will hold a 17% market share of the automotive industry in Europe. This will make it the area’s second-largest automotive company.
The selling of GM Financial’s European operations will be for a joint venture between BNP Paribas SA (ADR) (OTCMKTS:BNPQY) and PSA Group. The two will each have a 50% stake in the company. It will be fully consolidated by BNP Paribas and accounted under the equity method by PSA. General Motors Company’s current platform and team will continue to lead the operations.
General Motors Company will continue to be active in Opel and Vauxhall. This is possible through its ownership of warrants to purchase shares of PSA Group. The two companies are also planning to collaborate in the future on a variety of projects.
General Motors Company’s decision to sell Opel, Vauxhall and its European GM Financial operations are part of its efforts to transform its company. This includes plans to increase its performance and accelerate momentum. It expects the deal to close before the end of 2017.
GM stock was down 2% and BNPQY stock was down 1% as of Monday morning.