GM's Opel and PSA Group in merger talks

PSA mulling Opel buy

German Economy Minister Brigitte Zypries said it was totally unacceptable that talks about a deal have taken place without German works councils or local government being consulted.

Unite union leader Len McCluskey said he wanted urgent talks with GM.

GM is reportedly seeking a multi-billion dollar amount for Opel.

PSA Group confirmed Tuesday that it is "exploring numerous strategic initiatives aiming at improving its profitability and operational efficiency, including a potential acquisition of Opel", GM's Germany-based division.

For PSA, owner of the Peugeot, Citroen and DS brands, acquiring GM's Opel and Vauxhall brands would give it a 16.3% share of the European passenger auto market, vaulting it into second place in the region, ahead of French rival Renault and behind Germany's Volkswagen.

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A spokesman for the Department for Business, Energy and Industrial Strategy (BEIS) said: "Speculation over a merger between GM and Peugeot is a matter for the companies involved". Any renewed effort is likely to center on finding ways to cut costs - and ultimately jobs -- because the two have overlapping product offerings.

Concerns have been raised about Vauxhall's 35,000-strong United Kingdom workforce as General Motors (GM) considers the sale of the loss-making arm to Peugeot-owner PSA Group.

It would overtake Renault to become the second largest European carmaker, after Volkswagen. One scenario already raised by General Motors sources in discussions with Autocar is the possibility of a sweeping consolidation of Vauxhall operations in the United Kingdom, with the brand name resigned to history and being replaced by Opel - a move that was seriously considered by General Motors following the financial crisis of 2009 but ultimately decided against.

In 2016 Opel Vauxhall had a western Europe market share of 6.6%, while Peugeot, Citroen and its DS upmarket subsidiary had just over 10 per cent, according to Automotive Industry Data. It had hoped to reach break-even by now, but last year posted a loss of $257 million for the year.

Spokespeople for Opel and the French government, which holds 14 percent of PSA, had no immediate comment.

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