GM to take charge up to $4.5 bn for Opel sale

 

US automaker General Motors (NYSE: GM - news) said Monday the sale of its money-losing European division to France's PSA will result in one-time costs of up to $4.5 billion in pension expenses.

With (Other OTC: WWTH - news) the sale of European automobile brands Opel and Vauxhall and financial operations for 2.2 billion euros ($2.3 billion) to French company PSA, GM will need to account for deferred tax assets and pension losses.

The charge would be $4-4.5 billion, GM said in an investor presentation.

Pension obligations with Opel/Vauxhall in Europe, with the exception of Germany and some smaller plans, will remain with the US giant. GM also will pay PSA three billion euros for settlement of transferred pension obligations associated with German plans.

Even (Taiwan OTC: 6436.TWO - news) with these costs, GM estimates the deal will allow it to unlock $2 in capital for share repurchases, GM chief executive Mary Barra said.

Barra said the sale of the European division would allow it to focus on more profitable regions, such as North America and China.

"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," she said.

The sale includes six assembly plants and five component-making facilities and some 40,000 employees.

GM shares fell 0.9 percent to $37.89 in pre-market trading.

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