General Motors Co has agreed to sell its Opel/Vauxhall subsidiary and European Financial Operations to the PSA Group in a transaction worth an estimated € 2.2 Billion.

With PSA Group’s acquisition of Opel and Vauxhall, the parent company of Peugeot and Citroen will become the second largest automotive company in Europe with a 17 percent market share.

“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said Carlos Tavares, chairman of the Managing Board of PSA. “We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”

“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,” continued Mr. Tavares.

“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”, said Mary T. Barra, GM chairman and chief executive officer.

“For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.

“We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects,” Ms. Barra concluded.

The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing, and R&D for the PSA Group. In fact, it should also accelerate Opel and Vauxhall’s turnaround generating around 2 percent operating margins by 2020 and 6 percent by 2026.

The transaction includes all of Opel and Vauxhall’s automotive operations, comprising Opel and Vauxhall brands, six assembly and five component-manufacturing facilities, one engineering center (Rüsselsheim) and approximately 40,000 employees. GM will retain the engineering center in Torino, Italy.

Opel/Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms over the coming years.

Along with the sale of the Opel and Vauxhall brands, the PSA Group together with BNP Paribas will also acquire GM Financial’s European operations through a newly formed 50/50 joint venture that will retain GM Financial’s current European platform and team.