Is GM Paying PSA to Buy Opel?

General Motors Co.’s deal to sell its Opel unit for €2.2 billion to PSA Group is more than offset by the pension obligations GM has agreed to shoulder, The Wall Street Journal says.

The sale comprises €1.3 billion for Opel itself and €900 million for Opel’s financing operation. But only about half the purchase price is in cash. The balance will be warrants that enable GM to buy and immediately sells PSA shares over the next several years.

The Journal points out that GM’s balance sheet will retain Opel’s European pension deficit of €6.5 billion ($6.9 billion). GM also is, in effect, giving PSA €3 billion ($3.2 billion) to cover a portion of the pension obligations, which include those covering active workers in Germany.

The newspaper figures the deal means GM is paying PSA at least €800 million to rid itself of chronic losses by Opel, and perhaps more if PSA’s share price declines.