General Motors announced today the sale of their entire European arm of operations Opel Vauxhall to Paris based automaker PSA Groupe.

Long rumored, the sale will include both the Opel and Vauxhall brands along with all of their associated assembly plants, an engineering center and the GM financing arm for Europe. The 2.23 billion dollar acquisition will make PSA Group who manufactures brands Peugeot, Citroën, and DS the second-largest in Europe.

British brand Vauxhall was purchased by GM in 1925 with Opel of Germany being purchased in 1931. After World War II the brands eventually became merged for all intents and from the 1980’s on offered virtually identical product.

In the United States we had a short offering of Opel products in the 1970’s but we know their cars well in the past decades having seen many of them in the form of Saturns and Buicks. Today, the Buick Regal and the Buick Cascada for instance are sourced from Opel in Europe.

And that gets us to how will this sale affect us here in North America. In terms of products, the current generations of vehicles currently sold and manufactured together as GM models around the globe will continue until their lifespans are over.

From that point forward all-new product will be developed and owned intellectually by PSA Group. GM says however they will continue to work with PSA Group to develop shared technologies for cars such as electrification.

It basically means that at some point, the Opel built cars or Opel sourced platforms we have come to know in the US will at some point have to come from somewhere else like here at home or GM’s Asian partners.

GM has raided the Opel parts bin for decades for many of our North American built products so this sale will force them to look within going forward when it comes to engineering. Of note however, with Buick being all but a Chinese brand now, we could begin to see more of their models sourced from that continent.

GM will still have a footprint in Europe however as their Chevrolet and Cadillac brands still sell some American sourced models but in very small numbers.

The sale for $2.2 billion sounds like a bargain but also to be considered is that GM is handing three plus billion dollars right back to settle pension and retirement obligations and will likely spend another billion on retained pension plans as part of a deal.

While it really becomes a loss on paper, the sale gives GM the freedom to spend more on product development for what they do build and sell here at home. This means more development dollars for trucks, SUV’s and the larger cars GM makes their bread and butter on.

For the PSA Group this acquisition gives them two more brand networks and product lines to expand their growth into a large of of the European Union where they have yet to realize full potential.

The transaction is expected to close before the end of 2017 should nothing go wrong. From over here it looks easy enough but political headwinds do face the deal over in Europe.