General Motors Co. will practically pay France's PSA Group totake its long-struggling European unit off its hands as it looks tocauterize a perennial bleeder.

PSA will pay a total of $2.2 billion to buy GM's German Opelunit, its U.K. sister brand Vauxhall and its European auto lendingbusiness. In return, GM will give the French carmaker $3.2 billionto cover future Europe pension obligations and keep managing $9.8billion worth of plans for existing retirees.

The European burden on GM's balance sheet will now be confinedto pensions, leaving Peugeot owner PSA with the task of fixing thetroubled Opel brand and turning around a business that's lost about$9 billion since 2009. Once the deal closes, GM will pay about $400million annually for 15 years to fund the German and U.K. plans,spokesman Tom Henderson said.

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