Drive Group has bought Sherwoods Vauxhall business for an undisclosed sum.
Sherwoods was established as a family business in the 1920s. It has Vauxhall dealerships in Darlington, Stockton and Northallerton, employing 151 people.
It is rated 169 in the Motor Trader Top 200 Dealer Groups with annual turnover of £52.9m.
Drive Group has a network of Vauxhall dealerships across the country, including Redcar and Hartlepool, and has a head office in Leicester. It is rated 65 in the Motor Trader Top 200 with annual turnover of £222.1m
Sherwoods managing director Simon MacConachie said: “There’s a sadness because we have been known for so long as a highly-respected Vauxhall dealer, but we have decided that this is the right move at the right time for all parties.
“We believe it is a really positive step for the staff because the larger scale of the Drive Group opens up new opportunities that we, as a smaller company, could not pursue.
“Also, culturally we think it will be a good fit for our people. Drive is a high-performing, well-respected group and the offer they made was simply too good to turn down.”
MacConachie took over as managing director 18 months ago and his father, Alasdair, has been at the heart of the business for 37 years.