GM to sell Allison Transmission

General Motors Corp. has reached a definitive agreement to sell its Allison Transmission commercial and military business to two private equity firms — The Carlyle Group and Onex Corp. — for approximately $5.6 billion.

The sale agreement covers substantially all of Allison Transmission, including seven manufacturing facilities in Indianapolis and its worldwide distribution network and sales offices.

Allison's production facility in Baltimore is dedicated to the production of conventional and hybrid transmissions used in GM's retail pick-up trucks and SUVs and will remain with GM. The transaction is structured to preserve both companies' competitive strengths in their respective product lines and is expected to close as early as the third quarter of this year pending union and regulatory approval.