French automaker PSA Group is in talks to acquire the European operations of General Motors' (GM) business, including the Vauxhall and Opel brands.
PSA and GM have earlier had a close alliance, working together on three projects since 2012, when GM had a 7% stake in PSA.
GM has however divested its share in December 2013.
The two groups are examining several expansion and cooperation possibilities. And, as part of such an expansion strategy, the acquisition deal is being discussed.
As the deal is still being discussed, the French automaker noted that there is no assurance that an agreement will be reached.
PSA Group which owns the Peugeot, Citroen and DS brands, acquiring Opel and Vauxhall is expected to add about 16.3% share or about 2.5 million sales in the European car market. And it is expected to push PSA Group ahead of Renault and only behind Volkswagen, Reuters noted.
News of the potential acquisition have triggered responses from Germany’s industrial union IG Metall. It said that the acquisition of Opel, a German brand by a French automaker, without the consultation from the country’s works councils and local government would be a breach of German and European co-determination rights.
The news of the potential acquisition was received as a good news from investors, which is claimed to have increased the share values of PSA Group and GM.
According to Reuters, it is one of GM’s CEO Mary Barra’s bold decisions to bring profitability and returns ahead of market share.
Right from her appointment in 2014, Barra has been taking decisions which minimise loss-making propositions.
The list of decisions include pulling out of Russian and Indonesian markets, taking out Chevrolet brand from Europe and cutting sales to rental car fleets, which had been making no profits for long time.
