PSA Group Closing In On Opel Deal With General Motors

PSA Group is edging ever closer to purchasing Opel from General Motors in a move which will see PSA become Europe’s second-largest automaker.

Bloomberg reports that the two companies will negotiate throughout the weekend to reach and announce a deal on Monday. As further evidence that the deal is progressing, a tentatively-scheduled meeting between European labor union officials and PSA management has been set for next week.

PSA’s chief executive Carlos Tavares is confident that he can create a restructuring plan to return Opel and Vauxhall to profitability and one that will allow Opel to serve as the company’s premium German alternative to its solely French brands.

Before a deal can be reached, a few key issues need to be resolved. For one, a negotiating point will revolve around how PSA can achieve 2 billion euros ($2.1 billion) in savings from the deal as well as how the pension plan for Opel retirees (currently underfunded by $9 billion) will be managed.

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