PSA Targets €2 Billion Savings in Opel Acquisition

PSA Group estimates that acquiring Adam Opel AG from General Motors Co. will hike the company’s global car sales to 5 million units and save the two operations as much as €2 billion ($2.1 billion) per year, sources tell Reuters.

The news service says reduced costs would come from pooling such functions as product development and purchasing, while combining PSA and Opel platforms and powertrains. Labor costs also could be reduced, most likely through attrition rather than layoffs.

A combined PSA-Opel would generate roughly €75 billion in revenue and control about 16% of the European car market.

Reuters’ sources say PSA and GM are aiming for an early March sale, confirming earlier reports. But the timing will depend on the outcome of talks between PSA CEO Carlos Tavares and British Prime Minister Theresa May about the future of Opel’s two factories in England.

Tavares has already assured German labor officials and Chancellor Angela Merkel that PSA will honor all current labor agreements and job guarantees with Opel’s workforce.