General Motors has scrapped plans to merge its troubled German unit Opel with PSA Peugeot Citroen because of the French carmaker's financial woes, a news report said Wednesday. "GM gave up in early November on the merger plan between Opel and PSA Peugeot Citroen's auto division," French financial newspaper La Tribune said on its website, citing "a well-informed French source".
The source told the paper the prospective deal was "suspended, to say the least, and in all likelihood buried". Instead of a merger, the carmakers will pursue a more limited partnership in four specific areas, which they had already announced on October 24, La Tribune said. The companies had already announced in February that GM was taking a seven-percent stake in PSA Peugeot Citroen as part of a "strategic alliance". Neither company had confirmed or denied plans for a full merger. GM said Wednesday that plans for the alliance were still going forward. "The alliance between GM and PSA is progressing as planned. We are fully focused on earning the benefits from the alliance that we have identified," said GM spokesman Greg Martin.
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