Published: Sun, March 05, 2017
Finance | By Laverne Griffith

Deal done? Reports PSA/GM have signed Opel agreement

Another sticking point was GM's demands that "a PSA-owned Opel be barred from competing against its own Chevrolet lineup in China and other overseas markets", according to the Reuters source, who said it was resolved after the American company bundled the issue together with the pension liabilities offering PSA more than the initial proposal of $1 billion to $2 billion to fund the pension plans. Now, the two sides are planning to work through the weekend as they continue to try to hammer out some kind of an agreement.

If a deal is reached, the acquisition of Opel will likely vault the French manufactures to the second place in Europe, next only to Volkswagen.

McCluskey said: "Mr Tavares gave assurances that current production commitments would be met should the takeover with PSA go-ahead".

There is additional urgency in the coming days because the automakers probably don't want to announce a corporate tie-up during the Geneva Auto Show, which starts Tuesday. A spokesman for GM's European unit declined to comment.

Automotive News is reporting that the PSA Group board has just voted in favour of the deal that's been struck and a confirmation of the agreement would be made on Monday.

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To build support for the deal, PSA executives have been touring Europe to meet with labour leaders and politicians and assure them that Opel's workers and production sites will be protected.

Opel employs 34,500 people in Europe, with more than 16,500 in Germany and 4,500 in Britain.

But in recent years the firm has booked repeated losses, costing Detroit-based GM around $15 billion (14 billion euros) since 2000.

"The UK market is the largest market in the European Union for Vauxhall/Opel so GM does have a moral obligation not to turn its back on the communities and workers who have helped make this company what it is today", Unite general secretary Len McCluskey said.

Confirming the takeover, the companies said they were looking at ways of "improving profitability and operational efficiency". The complexity of talks could lead to a delay, the people said.

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