General Motors is selling its two major European brands to French automaker PSA Group and pulling back from the world’s third-largest auto market, where the company has struggled to turn a profit for nearly two decades.
GM’s Opel and Vauxhall brands, as well as the European arm of its financial division, were valued at about $2.3 billion in the transaction. If the deal clears regulators, it is expected to close by the end of the year, the companies said.
PSA Group will then become the second-largest automaker in Europe behind Volkswagen.
The sale includes 11 manufacturing facilities and one engineering center that collectively employ about 40,000 people, according to the companies. GM will incur a non-cash accounting charge of $4 billion to $4.5 billion as a result of the sale.
GM has long lost money on its European brands, despite several turnaround attempts. Chief executive Mary Barra told an audience in Washington last week that the European operations would have broken even last year if not for the Brexit vote and corresponding economic fallout.