Published: Wed, February 15, 2017
Technology | By Timothy Carter

PSA in talks to buy Opel/Vauxhall

PSA in talks to buy Opel/Vauxhall

That left GM with its Germany-based Opel Group, which also manufactures Vauxhall-branded vehicles.

While an agreement could be reached in the coming weeks, PSA shares rose 4.9 per cent to 18.81 euro at 1:04 pm GM, which has controlled Opel for almost 90 years, has been active in recent years for a co-operation with Peugeot in order to cut costs and improve profitability at Opel and Vauxhall.

This isn't the first time the company has explored selling its European brands.

Such a deal would see GM exit United Kingdom and Europe, while transforming PSA Group into Europe's second-largest carmaker with a 16% share of the European market.

According to reports by Reuters and the DPA (Deutsche Press Agency), the American carmaking giant is deep in negotiations to offload its flagship European brands to the French PSA Group.

France's PSA Peugeot-Citroen (PSA) wants to acquire General Motor's European operations, but analysts and academics can't raise much enthusiasm for the deal.

However, PSA also made it clear that "there can be no assurance that an agreement will be reached".

Peugeot's statement didn't say whether it would consider using equity on either side of the deal, and a spokesman declined to add any further comment.

The negotiations revolve around full merger of operations between Opel, Vauxhall, Citro?n, Peugeot and DS, and come after previous attempts to closely align the operations of the German and French vehicle makers. The U.S. group could inject its business into PSA in return for a shareholding, though it sold its stake in the French group a few years ago. GM stock was up more than 5% Tuesday morning, at $37.39 in a 52-week range of $27.34 to $38.38.

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