France's PSA Group has agreed to buy Opel from General Motors in a deal valuing the business at 2.2 billion euros, creating a new European car giant to challenge market leader Volkswagen. Sara Hemrajani reports.
New owners in the driving seat at Opel. PSA Group, the maker of Peugeot and Citroen cars, is buying the business off General Motors as the American auto giant exits Europe. The deal values Opel and its British brand Vauxhall at 2.2 billion euros. It also creates the continent's second-biggest carmaker behind Volkswagen and ahead of Renault. (Soundbite) PSA Chief Executive, Carlos Tavares, saying (English): "We want to create a European automotive champion from the combination of a French and a German company...And trust, that with our support we will totally unleash the full potential of the Opel and the Vauxhall brands." General Motors bought Opel back in 1929, but that relationship hasn't been profitable for nearly 20 years. PSA is promising to revive fortunes and cut costs. But British and German workers are cautious about what this means for their job prospects. (Soundbite) Manfred Geiger, Opel employee, saying (German): "Mergers have never meant more jobs. In my view, jobs will be cut through the merger. Now we have to see how they will be cut, if they are cut, how much time it will take and so on." Investors have given the deal their seal of approval, sending PSA's shares up as much as 5 percent. The acquisition caps a strong two-year recovery for the French company, which avoided bankruptcy in 2014.