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William Maley

Opel/Vauxhall News: Rumorpile: General Motors, PSA Group Value Opel At $2 Billion

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How much is Opel worth? According to Bloomberg, the valuation being discussed by General Motors and PSA Group puts it around $2 billion dollars. According to sources, the total comprises about $1 billion in cash and about $1 billion in liabilities. The amount could change as two are still assessing a number of items such as the value of brand rights and savings potential.

The sources also the framework for PSA to buy Opel could be finished by Thursday. This would be the same day when PSA Group reports full-year earnings. The sources go on to caution this could be pushed back because of the complex nature of the deal such us finding ways to reduce costs while keeping workers and the various unions happy.

Source: Bloomberg


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I will be honest in saying I am surprised it is that high. I feel the 1 Billion in cash is the payoff price GM feels needs to be given to unload the Opel / Vauxhall deal.

The more I think about this, the more I hope GM just get's rid of the whole thing and starts a clean sheet approach to offering GM products in Europe.

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It isn't much money for a car company, but GM doesn't make money on it, they should just sell it.  PSA would gain market share and have sizable chunks in France, UK and Germany, in time they can consolidate brands or models and get the profit from it that way.  Makes sense for both sides.

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Does anyone else get the vibe of the Fiat deal before the financial meltdown? The one with the put involved for like 4 billion. GM has put all their eggs in the basket for the midsized platform, most of Buick, an electrified lineup with GM technology, a streathened PSA to do battle with in 7-10 years ...

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Does anyone realize what the total value of this deal really is?

Opel is in a death spiral GM as an American firm in The Euro Union that can not be broken.

Now we have listed here $2 billion which is good money for a Firm losing money.

But the real value here is that GM cutting the traditional yearly losses and driving up GM stock by up to 35% as many on Wall St predict. 

How much money is this? Well GM is worth $35-38 billion so do the math of what 35% of $38 billion is.  That is more value than GM would make with Opel in Decades.

It also is enough money for orojrcts and technology that will make a real difference in the future. 

This is much more about bigger money than what they get for Opel alone.

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Also we need to remember at Buick we are only looking at three vehicles that are tied to Opel.

RegaL, Verano,  and Cascada are all Opel based. One is dead and will be gone soon. The second one is a very limited model and has a limited future so the Regal is the only model that is in place for issues. Even then Buick could replace one model and move on with no harm at worst case. Dealers on keeping the doors open are not contingent on Regal sales. If they had been they would be gone by now as Regal sales while ok are not company sustaining.

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18 hours ago, smk4565 said:

It isn't much money for a car company, but GM doesn't make money on it, they should just sell it.  PSA would gain market share and have sizable chunks in France, UK and Germany, in time they can consolidate brands or models and get the profit from it that way.  Makes sense for both sides.

A Car company??? Its a Division.. at best a subsid. Considering the situation... its $2B is pretty nice

1 hour ago, hyperv6 said:

Also we need to remember at Buick we are only looking at three vehicles that are tied to Opel.

RegaL, Verano,  and Cascada are all Opel based. One is dead and will be gone soon. The second one is a very limited model and has a limited future so the Regal is the only model that is in place for issues. Even then Buick could replace one model and move on with no harm at worst case. Dealers on keeping the doors open are not contingent on Regal sales. If they had been they would be gone by now as Regal sales while ok are not company sustaining.

The new Regal could simply be a Malibu mate like the last. In fact it probably needs to be a bit larger. 

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Even at a division, $2 billion isn't much.   Mercedes spend $1 billion on the mid-cycle refresh of the last E-class, this gets you like 8 cars for only double that money.  

 

Buick doesn't really even need the Regal, they could sell 3 crossovers and the LaCrosse, sedans sales are tanking anyway.  And if Buick needs another sedan they can clone the Malibu or Cruze.

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A billion in cash and a billion in assumed liabilities..... for Opel/Vauxhall.  Why should GM assume a billion in liabilities?

I still remember when GM was stupid enough to negotiate a deal to buy FIAT and then get taken to the cleaners for $4 billion as an exit fee.  THAT greenmail saved FIAT and allowed Sergio to acquire Chrysler.  Better to leave the liabilities AND the boat anchor squarely in PSA's hands.  Europe's auto market is heading south and it needs to be culled.  Capacity needs to disappear and somebody may need to go out of business.  Remember the nearly 1000 dealers that went out of business in 2008-10 in the wake of the Great Recession here in the USA, along with a bunch of factory closures since Oldsmobile was killed in 2004?  Europe needs exactly the same thing simply because the sales are simply not there.

Better that PSA deal with this than GM, simply because Paris and Berlin will have to deal with economic reality very soon.

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