March 6, 2017 / 3:07 PM / 6 months ago

FACTBOX-Details of GM's sale of Opel to PSA

    By Nick Carey
    DETROIT, March 6 (Reuters) - France's PSA Group          
said on Monday it agreed to buy Opel and its British Vauxhall
brand from General Motors        in a deal valuing the business
at 2.2 billion euros ($2.3 billion). 
    Below is a summary of some details of the transaction, which
is expected to close in 2017:
    
    - GM will receive 1.32 billion euros for the Opel
manufacturing business in the form of 650 million euros in cash
and 670 million in PSA share warrants.
    - PSA and BNP Paribas           will pay 900 million euros
for Opel's financing arm, to be operated jointly and
consolidated by the French bank.
    - PSA says it will return Opel and its British Vauxhall
brand to profit, with an operating margin of 2 percent within
three years and 6 percent by 2026.
    - PSA says profit can be achieved in part through 1.7
billion euros in joint cost savings. In a client note, Barclays
equity research analysts said this was below the 2 billion euros
in savings targeted by GM and Opel in 2012. 
    - The Opel sale cuts GM's cash balance requirement by $2
billion, allowing it to accelerate share repurchases. 
    - GM will record a special, non-cash charge of $4 billion to
$4.5 billion. 
    - GM will retain $6.5 billion in underfunded pensions at
Opel.
    - The U.S. automaker will also issue $3 billion in debt
toward covering some $3.2 billion in underfunded pensions that
will be transferred to the German government.
    - GM says that without Opel, its adjusted earnings per share
in 2016 would have been $6.40, versus its reported total of
$6.12. The company's adjusted margin would have been 8.6
percent, versus the 7.5 percent the Detroit-based company
reported.
    - Opel has six assembly plants, five component plants and
around 40,000 employees.
    
    ($1 = 0.9432 euros)
    

 (Reporting By Nick Carey; Editing by Meredith Mazzilli)
  

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