General Motors has agreed to sell its European business in deals worth $2.3 billion. Peugeot SA will acquire General Motors’ Opel and Vauxhall brands for $1.4 billion, while General Motors’ European financial operations will be jointly acquired by Peugeot and BNP Paribas SA for around $955 million. The Wall Street Journal reports that the deal is expected to close by the end of the year, and it will increase Peugeot’s share of the European car market to make it Europe’s second biggest car maker behind Volkswagen.
General Motor’s exit from Europe comes after the company has failed to make money for nearly 20 years. CNN reports that Opel and Vauxhall have lost a combined $18 billion over the last 16 years, highlighting the struggle for General Motor’s European operations. It also comes at a time when the UK is preparing to exit the European Union, and there will be many questions over the Vauxhall brand and whether job losses are an inevitable part of this transaction. General Motors has manufactured popular cars like the Astra and Corsa, both of which are branded Opel across Europe and Vauxhall in Britain.
Peugeot seems confident it can turn things around and get Opel and Vauxhall back on track in Europe. “We are confident that the Opel / Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees,” says Peugeot CEO Carlos Tavares.