* PSA, GM make progress in Opel deal talks - sources
* GM had linked pensions deal to "non-competes" - source
* PSA hopes to announce acquisition in days - sources
By Gilles Guillaume, Laurence Frost and Edward Taylor
PARIS/FRANKFURT, March 2 PSA Group and
General Motors hope to announce the French carmaker's
acquisition of Opel within days after narrowing differences on
pension liabilities at GM's European division and other issues,
sources told Reuters on Thursday.
Talks are progressing well ahead of a PSA board meeting to
be held before the tie-up can be unveiled, people close to the
discussions said, adding the deal could be announced as soon as
Monday, the eve of the Geneva car show.
The talks are not concluded, the people cautioned, and there
is still no guarantee a definitive deal can be reached, or that
the PSA board will approve it.
"Things are advancing as they should," said one source close
to PSA. "There's a sense of confidence now."
Spokespeople for PSA and Opel declined to comment.
The two carmakers, which already share some technology and
production in an existing European alliance, confirmed last
month they were negotiating an outright acquisition of Opel and
its British Vauxhall brand by Paris-based PSA, sparking
widespread concern over possible job cuts.
The first models jointly developed under their five year-old
partnership will be on display at the Geneva show, which opens
to the press on Tuesday.
PSA Chief Executive Carlos Tavares said last week a full
acquisition of Opel offered an "opportunity to create a European
car champion" and quickly exceed 5 million annual vehicle sales.
The French carmaker also expects savings of up to 2 billion
euros ($2.1 billion) from the tie-up, sources have said.
Difficulties soon emerged, however, over the future of a
near-$10 billion Opel pensions deficit and demands by GM that
the brand be barred from competing overseas under PSA ownership
against its own Chevrolet lineup.
Analysts including Alexis Albert at Barclays put GM's
European pensions deficit between $8 billion and $10 billion,
with Opel's German operations accounting for the lion's share
and the British Vauxhall unit for $1.1 billion.
The talks appeared to reach an impasse this week as GM
demanded restrictions on Opel sales in China in return for
covering part of the pensions hole, people with knowledge of the
matter said. GM had also sought to limit its pensions
contribution to $1-2 billion, one said.
PSA signalled to GM that it could not do a deal in which it
shouldered the bulk of the pensions deficit, several sources
said. GM boss Mary Barra publicly sounded a circumspect note
when asked about an Opel sale on Tuesday.
"We've done a lot to improve the business but we're
exploring opportunities to see if we can accelerate that even
more because scale does matter in this business," Barra told
The carmakers have since narrowed the gap on pensions and
the so-called "non-compete" agreements sought by GM, the people
said, although it remains unclear how or whether they have been
resolved. "We are making progress every day," said another
In his public comments on Feb. 23, CEO Tavares said he saw
export potential for the Opel brand under PSA ownership.
However, much of the existing Opel lineup would remain dependent
for years on technology and parts shared with other GM brands.
Detroit-based GM has been pressing for a deal barring those
legacy Opel models from markets including China, Russia and
Latin America, sources have said.
Tavares also told his board that PSA would rapidly redevelop
the core Opel lineup with its own technologies to achieve swift
cost savings, sources told Reuters last week.
($1 = 0.9517 euros)
(Additional reporting by Pamela Barbaglia in London, Matthieu
Protard in Paris and Arno Schuetze in Frankfurt; Editing by Mark