Bulletin: General Motors Co. Ratings Unaffected By Announced Sale Of European Business To PSA Group

NEW YORK (S&P Global Ratings) March 6, 2017--S&P Global Ratings said today that its ratings on General Motors Co. (BBB/Stable/--) are unchanged following the company's announcement that it has agreed to sell its Opel/Vauxhall subsidiary and GM Financial's European operations to the PSA Group in a transaction that values these segments at €1.3 billion and €0.9 billion, respectively. We believe that this transaction will help GM insulate itself from aggressive industry pricing and increased marketing and product-launch costs in a market where it faces limited growth prospects and excess capacity. Pro forma for the sale, we expect that the EBIT margins of GM's automotive operations will improve as it will likely continue to lose money in Europe in 2017 and

...NEW YORK (S&P Global Ratings) March 6, 2017--S&P Global Ratings said today that its ratings on General Motors Co. (###/Stable/--) are unchanged following the company's announcement that it has agreed to sell its Opel/Vauxhall subsidiary and GM Financial's European operations to the PSA Group in a transaction that values these segments at 1.3 billion and 0.9 billion, respectively. We believe that this transaction will help GM insulate itself from aggressive industry pricing and increased marketing and product-launch costs in a market where it faces limited growth prospects and excess capacity. Pro forma for the sale, we expect that the EBIT margins of GM's automotive operations will improve as it will likely continue to lose money in Europe in 2017 and 2018 because of the weakness of the pound sterling and the increase in inflation following Brexit. The sale will also help GM reduce its research and development and engineering costs related to Europe's tougher carbon regulatory standards....

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