PSA Group is buying Vauxhall-Opel for £1.9bn

The firm which owns French car manufacturers Peugeot and Citroen has confirmed it’s buying Vauxhall and Opel from General Motors as part of a deal said to be worth £1.9 billion.

This morning’s announcement follows weeks of speculation and concern by many in the UK that a buyout could lead to the closure of Vauxhall’s plants in Ellesmere Port and Luton. The French government owns a 14 percent stake in PSA Group and is thought to favour moving Vauxhall production to France in a bid to save paying potential tariffs once the UK has left the European Union.

This is a headache British PM Theresa May could do without, after months of private negotiations with bosses of Japanese car manufacturer Nissan - which employs 7,000 workers at its Sunderland plant in the North East.

The deal would make PSA Group the second biggest car company in Europe, behind Volkswagen Group but overtaking Renault-Nissan.

“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said PSA’s chairman of the managing board, Carlos Tavares.

“We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalising on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”

Reports suggest Vauxhall is committed to making its Astra at Ellesmere Port until 2021, while its Vivaro van is contracted to Luton until 2025.

Addressing concern raised by unions over jobs at the Ellesmere Port and Luton plants, Tavares added: “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”

A press conference will be held in Paris later this morning.

Source: PSA Group