‘Britain is open for businesses’ the words of Greg Clarke in the wake of the recent Peugeot takeover of Vauxhall and Opel.
It seems that international big business mergers show no signs of slowing down. And the age old question remains - ‘To merge or not to merge?’
The PSA Group (makers of Peugeot and Citroen) have agreed the purchase of Vauxhall and Citroen from General Motors against the backdrop of trading losses over the past 18 years and a pension deficit in the UK as much as £1bn.
Carlos Tavares of the PSA Group has been quoted as saying “we are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround”.
The PSA Group must, however, see potential in Vauxhall and Opel to pay the £1.9bn. It is reported that the car giant is hoping that the takeover will give them access to the UK market where demand PSA Group products has previously been poor. More recently, Carlos Tavares confirmed that he sees the takeover as an opportunity to take the group vehicles back into the American market which Citroen left in 1974 and Peugeot in 1991.
The takeover is also likely to be with a view of cutting operational costs to turn around the Opel/Vauxhall trading position and bolster Peugeot’s previously healthy turnover. The PSA Group has however ruled out job losses following the takeover, despite the Opel and Vauxhall losses and the unsettled position within the UK market following Brexit.
I believe this is not the last we will hear of the takeover, especially given the alleged ‘Nissan-style’ Brexit promises made by Opel and Vauxhall previously
Mergers and takeovers have many different potential outcomes for the businesses involved. This is why it is highly important to consider every possible outcome if companies are to go ahead with the transaction.
As well as having specialist knowledge in the process of mergers. Stephensons’ corporate solicitors have extensive experience in guiding companies through the transaction, whilst considering the commercial and regulatory implications which may affect the future running of the business.
For more on company mergers, the requirements of the regulatory bodies which may need to be considered for your particular merger, or if you are thinking on embarking on the merger process yourself, please contact Thomas Baker in the corporate team.