Could PSA make a success of Opel takeover?
The French carmaker PSA Peugeot Citroën is considering buying German carmaker Opel, a subsidiary of US car company General Motors. Opel has been making losses for years and is active in the same segment as PSA. Commentators see the move as risky but note that it could have certain advantages.
Alliance would be a European miracle
The prospect of a Franco-German alliance has the Süddeutsche Zeitung in raptures:
“Establishing a new fixed star in Europe at a time when US President Donald Trump is thinking in terms of friends and foes, emphasizing borders, shouting 'America first' and trying to sideline the rest of the world would be a great project, a huge project. … It is no mere coincidence that the Americans clearly want to get rid of their German subsidiary now. If the French take over they will be investing in a high-wage country. In France, as in Germany, business logic dictates that many jobs would have to be rationalised out of existence - amidst fierce resistance from the trade unions. … But if that huge task can be managed, if something truly big and new emerges here that can make a political and social as well as an economic impact, it would be a miracle. A European miracle.”
A deal full of risks
PSA could end up taking on more than it can cope with Opel, L'Obs warns:
“The acquistion of Opel is a complicated venture: PSA's last major deal of this type - the takeover of Chrysler Europe - ended in disaster in the 1980s. Taking over Opel will be just as risky: it's a huge company with 34,500 employees in Europe, 16,500 of them in Germany. What's more, Opel has a very different culture than PSA, and also needs to be restructured. Added to that, more investments are necessary than PSA can currently get together. ... Unless the company resorts to the scenario it evoked in 2012, namely that in exchange for Opel, GM becomes a shareholder of PSA, allowing the French carmaker to better defend its position in face of international competition.”