General Motors has sold its European operations in a deal worth $2.3 billion, the automaker announced today.
GM unloaded its Opel and Vauxhall brands to French automaker PSA Group. The deal also includes the sale of GM Financial’s European division, which will be jointly acquired by PSA and BNP Paribas.
Thanks to the deal, PSA is now the second largest automaker in Europe, just behind Volkswagen. The automaker, which also owns the Peugeot, Citroen, and DS brands, now has a 17-percent market share in the region.
GM has been losing money in Europe since 1999, so it’s clear the automaker needed to make a change. Meanwhile, building up PSA’s portfolio will leverage economies of scale in purchasing, manufacturing, and research and development. Savings are expected to total 1.7 billion euros by 2026, of which a significant part will be delivered by 2020.
The two automakers have worked together for years. Back in 2012, GM and PSA agreed to share platforms and co-produce certain vehicles. Now, they will continue to work together on a number of projects, including electrified technologies and existing supply agreements for Holden and certain Buick vehicles. In the future, PSA may also source a long-term supply of fuel cell systems from GM’s joint venture with Honda.