GM is selling Opel to Peugeot for $2.3 billion

General Motors is selling Opel, it's European division, to the PSA Group.

The automakers announced the sale on Monday. The deal will total $2.3 billion (2.2 billion Euros) and consist of GM's sales of its Opel/Vauxhall unit for $1.3 billion (1.3 billion Euros) and its European GM Financial arm for $1 billion (900 million Euros).

"We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround," Carlos Tavares, chairman of the Managing Board of PSA, said in a statement.

"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."

The deal had been speculated on for several weeks and occurred relatively rapidly. It will make the PSA Group the second-largest carmaker in Europe, after the Volkswagen Group.

GM will shed its European division after controlling it since before World War II. The US automaking giant flirted with selling Opel in the aftermath of its 2009 bankruptcy, but backed out of that deal. Since then, GM has struggled to make Opel profitable in the challenging mass-market for vehicles in Europe.

"For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum," GM CEO Mary Barra said in a statement.

"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."