Peugeot to buy GM's Opel, creating Europe's No. 2 carmaker

This undated image provided by car manufacturer Opel AG, shows a Opel Insignia Grand Sport, right, and the Insignia Sports Tourer station wagon. The cars will be shown at the Geneva Auto Show in Geneva Switzerland that starts Tuesday March 7, 2017. Europe’s automakers face huge questions: the impact of Britain’s decision to leave the European Union, Donald Trump’s proposed border tax on imports, the uncertain prospects for electric vehicles. Meanwhile they have to keep selling cars - in a ferociously competitive market. (Adam Opel AG via AP) (The Associated Press)

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FILE - In this Thursday, Feb. 23, 2017, file photo, the logo of PSA Group is pictured during the presentation of the company's 2016 full year results, in Paris. After billions in losses and years of unsuccessful turnaround attempts in Europe, General Motors decided that a foothold in the world’s third-largest auto market isn’t worth the drag on its bottom line. The Detroit automaker on Monday, March 6, 2017, announced that it’s all but getting out of Europe, selling its Opel and Vauxhall units to French automaker PSA Group. (AP Photo/Christophe Ena, File) (The Associated Press)

FILE - This Friday, May 16, 2014, file photo, shows the General Motors logo at the company's world headquarters in Detroit. After billions in losses and years of unsuccessful turnaround attempts in Europe, General Motors decided that a foothold in the world’s third-largest auto market isn’t worth the drag on its bottom line. The Detroit automaker on Monday, March 6, 2017, announced that it’s all but getting out of Europe, selling its Opel and Vauxhall units to French automaker PSA Group. (AP Photo/Paul Sancya, File) (The Associated Press)

PARIS – General Motors Co. is selling its loss-making European car business — including Germany's Opel and British brand Vauxhall — to French automaker PSA group.

The 2.2 billion euro ($2.33 billion) deal announced Monday in Paris by GM and PSA — maker of Peugeot and Citroen cars — will realign the industry and create Europe's No. 2 automaker after Volkswagen. The combined company could make 5 million cars a year.

PSA will join with French bank BNP Paribas in the deal, which foresees taking over 12 manufacturing facilities that employee about 40,000 people.

Amid concerns about job losses, PSA CEO Carlos Tavares promised to keep existing GM commitments to workers.

The purchase marks a major turnaround for PSA, bailed out just three years ago by Chinese investors and the French state.