US auto giant General Motors has agreed to sell its European operations to French automaker PSA Group for €2.2bn.
PSA will buy Opel/Vauxhall automotive operations for €1.3bn, while GM Financial’s European operations will be jointly acquired by PSA and BNP Paribas for about €0.9bn.
The agreement allows PSA to become the second-largest automaker in Europe after the Volkswagen Group, with a 17% market share.
The deal is also expected to save PSA about €1.7bn in purchasing, manufacturing and research and development by 2026. Most savings are expected to be realised by 2020.
The signing of the deal ends weeks of speculation and its impact on thousands of jobs at Vauxhall plants in the UK.
GM Europe has a workforce of more than 38,000 people, with the Vauxhall plant employs about 4500 people in the UK.
Commenting on the deal, PSA Group managing board chairman Carlos Tavares said: “We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities.
“Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”
GM chairman and CEO Mary Barra said: “For GM, this (deal) represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum.
“We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.”