PARIS (Reuters) - PSA Group (PEUP.PA) expects Opel to lose more money in 2017 as the French carmaker acquires the business from General Motors (GM.N), Chief Executive Carlos Tavares said on Wednesday.
“A certain number of good achievements have been made under General Motors’ leadership,” Tavares told shareholders at PSA’s annual general meeting in Paris, highlighting sales growth and reduced losses at the GM brand.
“But we must recognize that the losses are real and probably will be again in 2017.”
The maker of Peugeot, Citroen and DS cars agreed in March to acquire Opel in a deal valuing the GM European arm at 2.2 billion euros ($2.4 billion).
Tavares reiterated on Wednesday that the Opel acquisition -- due to close this year -- will create a new “European champion” ranked second to Volkswagen (VOWG_p.DE) in the region.
PSA shareholders voted overwhelmingly to approve the issue of share warrants forming part of the payment to GM for Opel.
Valued at 670 million euros when the deal was struck, the warrants convert to shares in the French carmaker in five years at the earliest, maintaining a financial incentive for GM’s continued cooperation with a PSA-owned Opel.
Reporting by Laurence Frost and Gilles Guillaume; Editing by David Goodman