GM closes Allison Transmission sell-off
DETROIT — General Motors says it has finalized the sale of its Allison Transmission unit to a pair of private equity firms for $5.6 billion.
The sale — to the Carlyle Group and Onex Corp. — was delayed in late July when a debt sale to fund the buyout was postponed because of diminished investor appetite tied to weakness in the U.S. mortgage and housing markets, Reuters reports.
The closure is a timely cash infusion for GM, which, under a restructuring plan, is in ongoing negotiations over contracts with the United Auto Workers. The company is trying to liquidate assets ahead of the Sept. 14 expiration of the current UAW contract, Reuters states.
Thee have been rumors as of late that GM is also talking to Navistar International about selling its modest stake in the medium-duty truck market.
“A lengthy strike by the UAW that involves all or a significant portion of our manufacturing facilities in the United States would have a material adverse effect on our operations and financial condition, particularly our liquidity,” GM said in its second-quarter report.
Allison makes transmissions for trucks, buses and military vehicles and has annual revenues of over $2 billion.
— with files from Reuters
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