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Peugeot to buy GM’s Opel, creating 2nd-largest European carmaker

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 purchase, which foresees taking over 12 manufacturing facilities that employ about 40,000 people, according to a joint statement by the companies.

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

GM will keep its manufacturing center in Turin, Italy. GM and PSA, which have had joint activities in the past, will continue to collaborate on electric car technologies and maintain existing supply agreements on some Buick models.