Detroit and Paris, 6 March 2017 – General Motors Co. (NYSE:GM) and PSA Group (Paris:UG) today announced an agreement under which GM’s Opel/Vauxhall subsidiary and GM Financial’s European operations will join the PSA Group in a transaction valuing these activities at €1.3 Bn and €0.9 Bn, respectively.
With the addition of Opel/Vauxhall, which generated revenue of €17.7 Bn in 20161, PSA will become the second-largest automotive company in Europe, with a 17% market share2.
Creates sound European foundation for PSA to support its worldwide profitable growth
“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 Carlos Tavares, chairman of the Managing Board of PSA. “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 capitalizing 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.”
“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,” continued Mr. Tavares.
Advances GM’s Transformation and Unlocks Value
“We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance”, said Mary T. Barra, GM chairman and chief executive officer.
“For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.
“We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects,” Ms. Barra concluded.
Strengthens Each Company for the Long Term
The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Annual synergies of €1.7 Bn are expected by 2026 – of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround. Leveraging the successful partnership with GM, PSA expects Opel/Vauxhall to reach a recurring operating margin3 of 2% by 2020 and 6% by 2026, and to generate a positive operational free cash flow4 by 2020.
PSA, together with BNP Paribas, will also acquire all of GM Financial’s European operations through a newly formed 50%/50% joint venture that will retain GM Financial’s current European platform and team. This joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA.
The transaction is another step in GM’s ongoing work to transform the company, which has delivered three years of record performance and a strong 2017 outlook, and returned significant capital to shareholders. It will strengthen GM’s core business, support its continued deployment of resources to higher-return opportunities including in advanced technologies driving the future, and unlock significant value for shareholders.
By immediately improving EBIT-adjusted, EBIT-adjusted margins and adjusted automotive free cash flow and de-risking the balance sheet, the transaction will enable GM to lower the cash balance requirement under its capital allocation framework by $2 Bn, which it intends to use to accelerate share repurchases, subject to market conditions.
GM will also participate in the future success of the combined entity through its ownership of warrants to purchase shares of PSA. GM and PSA also expect to collaborate in the further deployment of electrification technologies and existing supply agreements for Holden and certain Buick models will continue, and PSA may potentially source long-term supply of fuel cell systems from the GM/Honda joint venture.
Terms of the Agreement
Opel/Vauxhall automotive operations will be acquired by PSA for €1.3 Bn. GM Financial’s European operations will be jointly acquired by PSA and BNP Paribas for 0.8 times their pro forma book value at the closing of the transaction, or approximately €0.9 Bn.
The transaction has a total value of €2.2 Bn, for Opel/Vauxhall automotive operations and 100% of GM Financial’s European operations.
The transaction value for PSA, including Opel/Vauxhall and 50% of GM Financial’s European operations, will be €1.8 Bn.
In connection with this transaction, GM or its affiliates will subscribe warrants for €0.65 Bn. These warrants have a nine-year maturity and are exercisable at any time in whole or in part commencing 5 years after the issue date, with a strike price of €1. Based on a reference price of €17.34 for the PSA share5, the warrants correspond to 39.7 MM shares of PSA, or 4.2% of its fully diluted share capital6. GM will not have governance or voting rights with respect to PSA and has agreed to sell the PSA shares received upon exercise of the warrants within 35 days after exercise.
The transaction includes all of Opel/Vauxhall’s automotive operations, comprising Opel and Vauxhall brands, six assembly and five component-manufacturing facilities, one engineering center (Rüsselsheim, Deutschland) and approximately 40,000 employees. GM will retain the engineering center in Torino, Italy.
Opel/Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms over the coming years.
In connection with the transaction, GM will take a primarily non-cash special charge of $4.0-4.5 Bn.
Ongoing Pension Fund Commitments
All of Opel/Vauxhall’s European and U.K. pension plans, funded and unfunded, with the exception of the German Actives Plan and selected smaller plans will remain with GM. The obligations with respect to the German Actives Plan and these smaller plans of Opel/Vauxhall will be transferred to PSA. GM will pay PSA €3.0 Bn for full settlement of transferred pension obligations.
The transaction is subject to various closing conditions, including regulatory approvals and reorganizations, and is expected to close before the end of 2017.
The issuance of the warrants is subject to the vote of shareholders at PSA’s General Meeting of May 10th, 2017. The three main shareholders of PSA (the French State, the Peugeot family and DongFeng) representing in aggregate 36.6% of the share capital and 51.5%7 of the voting rights of PSA have undertaken to vote in favor of the resolution related to the issuance of the warrants to GM. In the event the warrant issuance reserved to GM and its affiliates is not approved by PSA’s General Meeting, PSA will settle the €0.65 Bn in cash over five years.
About PSA Group
With sales and revenue of €54 billion in 2016, PSA Group designs unique automotive experiences and delivers mobility solutions that provide freedom and enjoyment to customers around the world. The Group has three car brands, Peugeot, Citroën and DS, as well as a wide array of mobility and smart services under its Free2Move brand, to meet the evolving needs and expectations of automobile users. The automobile manufacturer PSA is the European leader in terms of CO2 emissions, with average emissions of 102.4 grams per kilometer in 2016, and an early innovator in the field of autonomous and connected cars, with 2.3 million such vehicles worldwide. It is also involved in financing activities through Banque PSA Finance and automotive equipment via Faurecia. Find out more at groupe-psa.com/en
PSA Group Forward-Looking Statements
This press release includes forward-looking statements and information about the objectives of PSA Group, in particular, relating to the acquisition of GM’s Opel/Vauxhall subsidiary and GM Financial’s European operations, and corresponding expected synergies. These statements are sometimes identified by the use of the future tense or conditional mode, as well as terms such as “estimate”, “believe”, “have the objective of”, “intend to”, “expect”, “result in”, “should” and other similar expressions. It should be noted that the realization of these objectives and forward-looking statements is dependent on the circumstances and facts that arise in the future. Forward-looking statements and information about objectives may be affected by known and unknown risks, uncertainties and other factors that may significantly alter the future results, performance and accomplishments planned or expected by PSA Group. These factors may include changes in the economic and geopolitical situation and more generally those detailed in Chapter 1.5 of the reference document filed with the Autorité des marchés financiers (the “AMF”) on 24 March 2016 under no. D.16-0204.
1 Opel/ Vauxhall financials correspond to financials of the contributed entity
2 Excluding Russia and Turkey. Source: IHS (February 2017)
3 IFRS. Subject to full review of US GAAP – IFRS differences
4 Defined as recurring operating income + D&A – restructuring costs – capex – capitalized R&D – change in working capital
5 Reference price is the 20-day volume-weighted average share price of PSA as of February 13th, 2017 (pre-leak of February 14th, 2017)
6 Based on 907 MM fully diluted shares outstanding
7 Based on a fully diluted number of shares outstanding of 907 MM shares, pro forma the exercise of all outstanding 2014 warrants
17:10 CET / 15:10 GMT / 11:10 EDT
Polestar unveils its first car – the Polestar 1 – and reveals its vision to be the new electric performance brand
Polestar, Volvo Car Group’s performance brand, has today revealed its future as a new standalone electric performance brand. Polestar has confirmed the company’s first three models, a new purpose-built production facility in China and a new, customer-focussed route to market with all-inclusive subscription-based services that will set a new industry benchmark for performance car buyers.
The company’s first car, Polestar 1, will start production in mid-2019. As an Electric Performance Hybrid, the car can travel up to 150km on pure electric power alone - the longest full electric range of any hybrid car on the market. In combination with its four-cylinder Volvo Drive-E engine, the Polestar 1 delivers 600hp and 1,000Nm of torque, placing the car firmly within the performance car segment.
Polestar will act as a technology spearhead for the Vol…
The birth of a new van and SUV fusion genre aimed at drivers with active lifestyles
Toyota City, October 6, 2017―Toyota Motor Corporation (Toyota) intends to showcase its new crossover genre concept vehicle, the Tj CRUISER, for the first time at the 45th Tokyo Motor Show 2017* to be held at Tokyo Big Sight from October 25 through November 5. The Tj CRUISER represents the harmonious balance between the roominess of a cargo van and the powerful design of an SUV.
The Tj CRUISER was designed for drivers with lifestyles where work and play dovetail seamlessly. The "T" in Tj CRUISER stands for "Toolbox" in reference to how the car can be used like a toolbox, while the "j" stands for "joy" in reference to the joy of visiting various places by car. The name "CRUISER," which is traditionally used for Toyota's SUV lineup, is assigned to the Tj CRUISER to express the power of the vehicle. Inside, the passenger seat can be reclined completely…
WATCH FORD GT CRUISE ATLANTIC OCEAN ROAD – WITH A DETOUR TO SET NEW TIME AT WORLD’S MOST NORTHERLY CIRCUIT Ford GT is star of latest in Ford’s video series Europe’s Greatest Driving RoadsSupercar island hops spectacular Norwegian coastline on amazing Atlantic Ocean RoadShowcases performance credentials with a lap record at little-known Arctic Circle RacewayCOLOGNE, Germany, Sept. 28, 2017 – Could this be the perfect road trip – a stately promenade of the ultimate coast road, followed by a record-breaking blast around a very special circuit, unfamiliar to all but the biggest racing fans?
The Atlantic Ocean Road, which showcases the jaw-dropping beauty of Norway’s shores, is certainly one of Europe’s Greatest Driving Roads, a video series from Ford that now turns the spotlight on the Ford GT supercar.
"The Atlantic Ocean Road has to be driven to be believed. Only the most hardened cynic could fail to be unmoved by a journey across scenery of such unimaginable beauty,” said internat…
DB11 Volante: return of the ultimate convertible Sports GTDB11 Volante is the latest evolution of Aston Martin’s iconic convertible Sports GTPowered by new 4.0-liter twin-turbo V8 for an exceptional combination of performance,efficiency and sporting character.Extensive interior options offers exceptional scope for personalisationOrders now being taken for delivery in spring 2018
13 October 2017, New York:
The most elegant of convertible Aston Martins begins a new chapter with the introduction of the eagerly-awaited DB11 Volante. Joining the DB11 Coupe, which was launched to wide acclaim last year, the new DB11 Volante sets new standards of performance, innovation, engineering and style to create the definitive open-top Sports GT.
Powered by a new 4.0-liter twin-turbo 503bhp V8 engine, the DB11 Volante is built around the allnew bonded aluminium structure first seen in the DB11 Coupe. Lighter and more rigid than the model it replaces, the DB11 Volante has been engineered to deliver a mu…