The PSA Peugeot Citroen group announced Monday that it has bought General Motors

The PSA Peugeot Citroen group announced Monday that it has bought General Motors (GM) from its subsidiary Opel / Vauxhall in a € 2.2 billion operation, which will make it the number two in Europe.

The purchase is broken down in the acquisition of Opel / Vauxhall for 1.3 billion euros, and the one of the financial subsidiary of GM in Europe for 900 million, said PSA in a statement.

PSA expects, thanks to this acquisition with which it increases its market share in Europe to 17% (last year its joint production was 2.95 million vehicles), to realize 1,700 million euros of synergies annually by 2026, Which in "a significant part" should be achieved by 2020.

"These savings should contribute to accelerating the recovery of Opel / Vauxhall", referring to the company's delicate financial situation, which has led to 16 consecutive losses: 257 million dollars (about 242 million dollars). Euros) in 2016 after 813 million in 2015.

In particular, the new owner is confident that Opel / Vauxhall will achieve a current operating margin of 2% by 2020 and 6% by 2026, in addition to generating a positive operating cash flow by 2020.

"CONTINUE DEVELOPMENT"

PSA President Carlos Tavares, who expressed his satisfaction with the commitment to GM on Opel / Vauxhall, pledged to "continue the development of this great company and accelerate its recovery."

Tavares said that his will is to manage PSA and Opel / Vauxhall taking advantage of "the identities of the respective brands", and in that respect said that with the "excellent models" that have already developed both groups for the European market, is convinced that the subsidiary European GM "is the good partner."

"For us, it is a natural extension of our alliance and we are impatient to move at a higher speed," he added.

The acquisition of EUR 900 million from GM's financial subsidiary in Europe, which serves 1,800 dealers in 11 countries, will be carried out by PSA and BNP Paribas with a 50% share each.

This business had represented a flow of about 9.6 billion euros at the end of 2016, of which about 5.8 billion million financed with deposits or securitization.

"GREAT STAGE"

GM CEO Mary T. Barra said that for her company, the assignment "is a new big step in the current one currently deployed to improve our efficiency and accelerate our dynamics", before remembering that this transformation is allowing them to obtain "results Record and sustainable for our shareholders. "

In practice, the "immediate improvement" of adjusted EBIT, the adjusted EBIT margin, adjusted free cash flow for the automotive business, and the reduction of the balance sheet risk, will allow GM, according to its calculations, to decrease by 2,000 Millions of dollars their liquidity needs.

That will open the possibility of increasing the purchases of shares "according to the market conditions".

GM will remain "exposed to the success" of what will be the "number two" of the European market, as it will have PSA share subscription bonds.

In addition, the two companies plan to collaborate in the deployment of electric car technologies, existing agreements will be maintained for the supply of some models with Holden and Buick brands, and PSA could be provisioned in the long term in fuel cell system with the consortium GM / Honda.