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General Motors quits Europe after CEO Barra makes assurances to British Prime Minister

CNBC logo CNBC 3/6/2017 Luke Graham

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General Motors' chief executive has refuted claims that the sale of its European Opel business was prompted by the Republican's proposed border tax policies. 

The U.S. car manufacturer will continue to distribute its iconic Chevrolet and Cadillac brands in Europe and will be on the lookout for "future collaborations" in the region, Mary Barra told CNBC Monday.

Asked by CNBC if the deal was driven by the border tax, Barra responded: "This (deal) is really focused on the synergies that we found in Europe across the board and really the two companies fit together quite nicely."

Her comments come hours after the firm agreed to sell its European manufacturing arm Opel to rival PSA Group, maker of Peugeot and Citroen. The announcement had prompted claims that GM has shied away from the region due to proposals by the new Trump administration to impose punitive tariffs on importers into the U.S.

President Donald Trump has spoken at length about lowering the tax burden on U.S. businesses. Meanwhile, Republicans in the House of Representatives have also proposed a reduction in U.S. statutory corporate tax which would likely lead to the introduction of a U.S. border tax adjustment, although plans are as yet unconfirmed.

The 2.2 billion euro ($2.3 billion) deal will increase PSA Group's sales volumes by 40 percent and accelerate the firm's market share to 16 percent, leapfrogging Renault and bringing it closer in line with Europe's market leader Volkswagen.

The deal sees GM remain in "collaboration" with PSA via 670 million euro ($709 million) share warrants, Barra added, insisting that the companies could work together in Europe despite competing in other regions.

"We understand that there'll be a point in time where that may indeed occur but we're also seeing areas to collaborate.

"I think if you look at business now there's many different businesses, even outside of this industry, where in some places you collaborate and some places you compete."

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