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Last
week, GM confirmed reports that it was in talks to sell its Opel
business to Paris-based PSA Group, which manufactures brands
including Peugeot.
If the deal goes through, it could net GM as much as $1 billion
in cash, Barron's says, citing analysts. However, the real value
from the sale would come from offloading a money-losing business
and refocusing on operations in China, Latin America and North
America, it said.
Last year, GM reported a $257 million operating loss from its
Opel unit. Cutting away Opel could gain GM nearly $1 billion in
additional annual cash flow, on top of the immediate proceeds
from the deal, Barron's said.
It also said that investors might reward GM's stock because the
sale would demonstrate a willingness by Chief Executive Mary
Barra to focus on value-generating business.
Barron's added that, although GM is a cyclical stock and a
downturn in auto sales is widely expected in the near future,
its trough earnings per share will be better than many investors
expect, perhaps around $3 to $4.
GM shares are trading around $37.
(Reporting by Carl O'Donnell; Editing by Phil Berlowitz)
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