Mercedes-Benz parent Daimler has sold its Smart car factory in northeast France to Britain's Ineos, which will use it to build a 4x4, the companies said in a statement Tuesday.
As part of the deal, all 1,300 workers at Hambach directly employed by Daimler and some of those employed by partners will keep their jobs, the group told AFP.
Another 200 people employed by partners may have to "look for other projects" as the factory's ownership changes hands, a source close to factory management told AFP.
"We have found a sustainable solution for Hambach which offers the site a clear future perspective," said Markus Schaefer, Daimler's head of research in a statement.
Petrochemicals firm Ineos had initially said it planned to build the Grenadier off-roader, its first foray into the automotive industry, in Wales.
But this summer it said it was considering buying Daimler's plant at Hambach instead.
"We simply could not ignore the unique opportunity offered by Hambach, namely the purchase of a modern automotive production plant with an exceptional workforce," Ineos boss Jim Ratcliffe said.
German auto giant Daimler caused surprise when it announced was putting the factory up for sale to try cut costs in the face of losses caused by the COVID-19 pandemic.
It will continue production of an electric-drive Smart and part of a new electric Mercedes SUV at the site until 2024, the source in Hambach said.
France's industry minister Agnes Pannier-Runacher welcomed the news as an "important step that will enable industrial activity in Hambach to be sustained."
The car maker's departure from Hambach marks the end of an era that began with great fanfare in 1997, when then German chancellor Helmut Kohl and French president Jacques Chirac inaugurated a plant to produce a mini two-seater city car.
Copyright Agence France-Presse, 2020