Despite this announcement, the two automakers will continue to move forward on elements of the alliance launched just 22 months ago, including shared vehicle platforms. According to PSA, these vehicles include a new subcompact MPV and a compact crossover both riding on existing PSA platforms, as well as an all-new subcompact commercial vehicle. Plans for a shared B-segment platform and a new small-displacement gasoline engine have been scrapped, however. In addition to these plans, GM and PSA are still hoping to benefit from synergies like joint purchasing and shared production, but the expected savings from these synergies has been reduced from $2 billion by 2017 to $1.2 billion by 2018.
GM is not discussing how much it expects to get from the sale of its 28.84 million shares of PSA, but The Detroit News indicates that the GM spent $400 million on the alliance 22 months ago.
In other sell-off news, GM has confirmed it has just parted with its its 8.5-percent common equity stake in Ally Financial. The sale, which included proceeds of about $0.9 billion, is expected to net GM about $0.5 billion which will be logged on its fourth-quarter balance sheet as a special item. The stock sale does not mean that Ally and GM are no longer on speaking terms, however, with CFO Dan Ammann saying, "Ally continues to play an important role in financing our dealers and customers in the United States."
Scroll down to read press releases on both GM divestitures.
GM Announces Sale of PSA Equity Stake
Strategic alliance continues
DETROIT – General Motors Co. today announced it is selling its entire 7 percent stake of 24,839,429 shares in PSA Peugeot Citroen (PSA) through a private placement to institutional investors. GM acquired the stake in PSA when it entered into its strategic alliance in March 2012.
"Our equity stake was planned to support PSA in their efforts to raise capital at the time of the creation of the GM and PSA alliance, and that support is no longer needed," said GM Vice Chairman Steve Girsky. "The alliance remains strong with our focus on joint vehicle programs, cross manufacturing, purchasing, and logistics. We're making good progress while remaining open to new opportunities."
From PSA Peugeot Citroen:
PSA and GM report progress on Strategic Alliance implementation
-Confirm continued cooperation for two products based on PSA platforms in B-MPV and C-CUV segments
-Add a new generation B-segment light commercial vehicle cooperation
-Announce balanced cross vehicle manufacturing
-Proceed with purchasing collaboration and confirm early favorable results
-After detailed evaluation, the collaboration on a B segment platform and associated small petrol engine is dropped from consideration
PSA Peugeot Citroen (PSA) and General Motors (GM) today announced further steps in their strategic Alliance. The Alliance remains structured around the main pillars of joint programs, purchasing, and logistics, focused on Europe and is extended into cross manufacturing.
The two groups confirm the continued cooperation for two products based on PSA platforms – the B-MPV (multi-purpose vehicle) and C-CUV (crossover-utility vehicle) programs. Additionally, the partners will cooperate on new generation products in the light commercial vehicle B-segment, which are based on a PSA new generation platform. The first vehicles from the Alliance are expected to launch starting in 2016.
In addition, the parties will balance manufacturing – with each company producing one vehicle for the other. As announced in October, B-MPVs from both companies will be built in the GM España plant in Zaragoza. Today the partners announced they will build their future C-CUVs in the French PSA plant in Sochaux.
"The Alliance between PSA and GM is based on a balanced approach. The vehicles of both manufacturers will be highly differentiated and fully consistent with their respective brand characteristics," said Dr. Karl-Thomas Neumann, GM Executive Vice President and President, Europe. "The partners are now focused on execution of the Alliance while remaining open to new opportunities."
"These announcements show that the Alliance continues to progress and is a key component of the Group's turnaround plans in Europe," said Philippe Varin, Chairman of the Managing Board of PSA Peugeot Citroën.
The updated synergies expected from the Alliance are estimated at approximately $1.2 billion by 2018. The synergies will be shared about evenly between the two companies.
GM and PSA also agreed to amend certain other terms of the Alliance. They will simplify the joint governance of the Alliance and remove as a ground for terminating the Alliance the failure to achieve a minimum number of cooperation programs within a specific time. They will also provide for a waiver of GM's right to terminate the Alliance under certain conditions in the event certain parties take a stake in PSA, in which case such parties would support the Alliance and GM would vote any PSA shares it would then hold in favor of any such transaction.
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GM Announces Sale of Equity Stake in Ally Financial
DETROIT – General Motors Co. (NYSE: GM) today announced it has completed the sale of its 8.5 percent common equity ownership in Ally Financial Inc. for total proceeds of approximately $0.9 billion.
In association with this transaction, GM expects to record a gain of approximately $0.5 billion, which will be treated as a special item in the fourth quarter of 2013.
"This transaction releases capital from a non-core asset and further enhances our financial flexibility," said Dan Ammann, GM executive vice president and chief financial officer. "Ally continues to play an important role in financing our dealers and customers in the United States."
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