Peugeot in talks over acquisition of GM's European business

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Peugeot in talks over acquisition of GM's European business

PSA Group, which makes Peugeot and Citroen cars, in in talks with General Motors over the acquisition of Opel Vauxhall.17 Feb 2017

The companies have been working together in Europe since 2012 and "regularly examine additional expansion and cooperation possibilities", GM said in a statement.

"PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA," it said.

The proposed deal has caused concern over job cuts in Germany, and GM chief executive Mary Barra has visited Opel's headquarters to calm fears, the Financial Times has reported.

A person close to the discussions told the Financial Times that the deal could lead to a full group merger between PSA and GM.

Competition expert Angelique Bret of Pinsent Masons, the law firm behind Out-Law.com said: "Any deal would be likely to require merger clearance from the European Commission and possibly other competition authorities. In previous cases, the Commission has allowed mergers in the car manufacturing sector on the basis that they would be unlikely to result in increased prices to consumers due to significant over-capacity in the European market."

"The Commission will nevertheless carry out a detailed and robust assessment of the merger, particularly given that the merger will attract significant attention from member states where jobs could be at risk as a result of any rationalisation," Bret said.