French automotive giant PSA Group is on the brink of completing a deal to buy General Motors' Opel and Vauxhall divisions, according to a report out of Europe over the weekend. More, the companies are now expect to announce details at 9:15am, Monday morning, in Europe - 7:15pm tonight, Australian time.
According to a Reuters report on the weekend, the PSA Group board has approved the purchase, according to two sources close to the deal. That report, too, pointed to a possible Monday announcement.
The two companies have been in negotiations for several weeks, with General Motors believed to be keen to off-load its unprofitable European brands.
According to French paper Les Echos, reported by industry journal Automotive News Europe, PSA will pay between $2.2 billion and $2.5 billion for Opel - half immediately, and half as shares, making GM a PSA shareholder, and not for the first time. GM previously held 7 per cent in PSA Peugeot Citroen, but sold it off in 2013.
It's reported a sticking point of the negotiations was Opel's $10 billion pension liabilities and General Motors' likely imposition of a 'non-compete' clause that would effectively prohibit PSA, which manufactures Peugeot and Citroen vehicles, from selling Opel cars into markets where Chevrolet already has a strong presence, particularly China.
However, Reuters is now reporting the 'non-compete' issue has been resolved, with General Motors agreeing to inject more than the originally proposed $1 billion into Opel's massive pension liability.
Automotive News Europe reports PSA will license the right to continue selling existing Opel models, under the Opel and Vauxhall badges as before. It is likely the deal will also accommodate sales of the newly revealed Insignia, if only because the alternative is to scrap them completely. How this will affect the Insignia's role as Australia's new Commodore, though, is unclear.
Above: The new Opel Insignia, which will soon come to Australia as a Holden. Australia's own lion brand has yet to offer any definitive word on what effect this deal could have locally, confirming only that GM "remains committed to the Holden brand".
PSA CEO Carlos Tavares said last week the acquisition of Opel would allow the PSA Group to "create a European car champion".
Tavares believed an expanded PSA Group which included Opel and Vauxhall, had the potential to sell five million cars annually while also saving the company around $2billion in rationalised production costs.
Opel has scheduled a town hall meeting for all employees at 9:45am this Monday, according to a Reuters source. This follows from another town hall meeting in Ruesselsheim, Germany, last Friday which was cut short after Opel management could not comment to the assembled workers about the impending deal.
What this means for Australia remains unknown. With Holden due to cease local production in October, General Motors' Australian arm was looking to fully-imported Opel-sourced vehicles to shore up its future.
Holden will undoubtedly need to continue sourcing future models from within the GM stable. And, with Tavares reported to be interested in expanding the Opel brand globally, we could see the German marque here again.
GM's effort to launch Opel in Australia lasted less than one year, but the market has a short memory. And, if PSA relaunches Opel in Australia, we might also see the French company take the Peugeot and Citroen brands back from current distributor, Sime Darby.
Stay tuned to CarAdvice for more news as this story unfolds.