March 6 (UPI) -- General Motors announced on Monday it is selling its Opel/Vauxhall subsidiary in Europe to France's PSA Group for $2.2 billion.
The transaction involves Opel/Vauxhall's automotive operations, including six factories, five component manufacturers, one engineering center and about 40,000 employees, all in Europe. PSA Group, makers of Peugeot and Citroen brands, will also acquire the European arm of GM Financial, General Motors' car loan and leasing division.
PSA Group will become Europe's second-largest carmaker, behind Volkswagen, through the purchase.
"We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance. For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. said Mary T. Barra, General Motors CEO, in a statement.
GM's Opel/Vauxhall subsidiary has lost nearly $20 billion since 1999. The sale indicates GM's willingness to sell an asset, responsible for one-tenth of its global sales and 18 percent of its workforce, to focus on overall profitability and returns to shareholders, the Detroit News said Monday.