General Motors Corp. said today it has sold its Allison Transmission division to The Carlyle Group and Onex Corp. for $5.6 billion.
Virtually all of Allison will shift to Washington, D.C.-based Carlyle and Toronto-based Onex. GM is keeping a production facility in Baltimore, Md.
The sale, anticipated in a story published in the Financial Times yesterday, means ownership of the Indianapolis-based maker of truck and tank transmissions shifts to private equity firms.
Observers have said ownership under Carlyle and Onex likely would benefit the Indianapolis operation because Carlyle’s deep military and government connections could result in military contracts. Other companies, such as Ford Motor Co., also might be interested in buying the transmissions now that Allison is no longer owned by rival GM.
The deal is expected to close early in the third quarter.
Allison employs about 3,400 in Indianapolis.