Shares in PSA surge on back of rumoured Opel cooperation talks

Feb 22, 2012, 17:26 GMT

Paris - Shares in French troubled French carmaker PSA Peugeot Citroen surged more than 10 per cent during trading Wednesday on the back of rumoured talks about a cooperation deal with Opel of Germany.

The companies were releasing little, if any, information.

But a statement by French Labour Minister Xavier Bertrand to radio broadcaster Europe 1 that PSA head Philippe Varin had told the minister about talks with General Motors, Opel's parent company, boosted speculation on both sides of the Atlantic.

Both car companies have seen their market share erode as their primary European market shrinks amid the ongoing eurozone crisis. Both have reported losses. Opel has laid off thousands of workers and closed at least one factory.

Automotive analysts said the two companies could benefit from some kind of cooperation by cutting costs.

PSA already has cooperation deals with BMW, Ford and Mitsubishi. A GM spokeswoman would only say that the company routinely talks to other companies in the business, without confirming any specific talks with PSA.

Despite the problems at its German subsidiary, GM as a whole has shown strong results of late. For 2011, GM reported record profits of 7.6 billion dollars, with strong sales in North America and China.

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