General Motors will sell its Allison Transmission unit that makes automatic gearboxes for commercial vehicles to private equity investors for 5.6 billion dollars, the parties said Thursday.
The Carlyle Group and Canadian-based Onex Corporation agreed to buy "substantially all" of Allison, including seven manufacturing facilities in Indianapolis, Indiana, and its worldwide distribution network and sales offices, a joint statement said.
GM will keep a production facility in Baltimore, Maryland, for conventional and hybrid transmissions used in GM's retail pickup trucks and sport utility vehicles.
"This is another important step to strengthen our liquidity and provide resources to support our heavy investments in new products and technology," said Rick Wagoner, GM chairman and chief executive.
"At the same time, this sale will position Allison for growth with strong partners in Carlyle and Onex, which have well-established track records of working effectively with their management teams, unions and employees."
Seth Mersky, managing director of Onex, said, "We believe Allison is poised for excellent growth in its sector with the increasing rate of adoption of automatic transmissions in commercial vehicles both in North America and abroad."
Allison, which employs 3,400 people, makes automatic transmissions for medium-sized and heavy-duty commercial vehicles. The company generates annual revenues of more than two billion dollars.
