General Motors sells its subsidiary Opel for $ 2.33 billion

The French car group PSA announced on Monday the acquisition of Opel, the European subsidiary of US giant General Motors, for 2.2 billion euros (US $ 2.3 billion).

PSA, which manufactures Peugeot and Citroen cars, also acquires the Vauxhall brand. The French company is now the number two manufacturer of automobiles in Europe, behind Volkswagen. The annual assembly capacity of PSA vehicles rises to around 5 million.

The transaction, which also involves the French bank BNP Paribas, allows PSA to take over more than 12 plants that employ about 40,000 people.

The CEO of PSA, Carlos Tavares, believes that this is a decisive transaction for the French group. His counterpart of General Motors, Mary Barra, believes that the deal will benefit both groups.

Opel has been in a chronic deficit for many years, having lost another US $ 257 million last year. GM has not reported a single full year of profits in Europe since 1999 but PSA aims to return the profitability of Opel and Vauxhall in the next three years,

The value of the shares of PSA jumped 4% at the beginning of trading session on Monday morning.

The transaction must, however, receive the usual regulatory approvals. It should be completed by the end of the year.

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