Pension Liabilities Loom Over Opel Sale

PSA Group’s plan to buy General Motors Co.’s Opel unit will hinge in part on how the companies resolve what analysts say is a pension shortfall of roughly $8 billion (€7.6 billion) the Financial Times says.

GM doesn’t break out its pension liabilities by its non-U.S. units. But FT and analysts at Barclays separately calculate that Opel’s pension liabilities are roughly $7 billion in Germany and $1 billion in the U.K.

PSA could agree to shoulder Opel’s pension obligation in the U.K., and leave the German component with GM, analysts suggest. One speculates that GM could try to sell the Opel pension risk to an insurance company, something it did in 2012 when it transferred about $26 billion in U.S. liabilities to Prudential Insurance Co. of America in a group annuity scheme.