* Deal values Opel at 2.2 bln euros
* Will help PSA overtake French rival Renault
* Sale of Opel seals GM's exit from Europe
(Adds detail and background)
PARIS/FRANKFURT, March 6 (Reuters) - PSA Group has
agreed to buy Opel from General Motors in a deal valuing
the business at 2.2 billion euros ($2.3 billion), creating a new
regional car giant to challenge market leader Volkswagen
The maker of Peugeot and Citroen cars vowed to return Opel
and its British Vauxhall brand to profit, with an operating
margin of 2 percent within three years and 6 percent by 2026
underpinned by with 1.7 billion euros in joint cost savings.
"We're confident that the Opel-Vauxhall turnaround will
significantly accelerate with our support," PSA Chief Executive
Carlos Tavares said in a statement issued by the two carmakers
By acquiring Opel, the French group leapfrogs rival Renault
to become Europe's second-ranked carmaker by sales,
with a 16 percent market share to VW's 24 percent. Last year,
PSA and GM Europe recorded 72 billion euros in revenue and 4.3
million vehicle deliveries between them.
GM will receive 1.32 billion euros for the Opel
manufacturing business - 650 million euros in cash and 670
million in PSA share warrants.
The Paris-based carmaker and BNP Paribas will pay
a further 900 million euros for the Opel financing arm and
operate it as a joint venture, fully consolidated by the French
The sale of Opel seals GM's exit from Europe. Eight years
after coming close to selling Opel to Magna International
, the Detroit auto giant has faced investor pressure to
offload the business and focus on raising profitability rather
than chase the global sales crown currently held by VW.
After fending off 2015 merger overtures by Fiat Chrysler
with support from her board, GM boss Mary Barra agreed
to target a 20 percent minimum return on invested capital and
pay out more cash to shareholders.
The two carmakers, which already share some production in an
existing European alliance, confirmed last month they were
negotiating an outright acquisition of Opel and its British
Vauxhall brand by PSA, sparking concern over possible job cuts.
The transaction also sees GM retain most of Opel's pensions
deficit, estimated by analysts at $10 billion. Earlier in the
talks, the U.S. carmaker had sought to offload a larger share of
the liabilities, sources have said.
Some smaller pension funds will be transferred to PSA, along
with a 3 billion euro payment to cover their full settlement,
the companies said on Monday. GM will also take an accounting
charge of $4 billion to $4.5 billion in relation to the deal,
expected to close in late 2017.
($1 = 0.9432 euros)
(Additional reporting by Gilles Guillaume; Editing by Sudip