The Chinese company Dongfeng could acquire 30% of PSA Peugeot-Citroën

The French consortium has confirmed to various media outlets the existence of talks with the Chinese group Dongfeng, through which the Asian company could absorb 30% of PSA Peugeot-Citroën.

Although PSA has not revealed many details, we do know that this process is not new; it has been in the works for several months and would result in a Chinese investment group very well positioned within the European market, as well as an easier expansion of PSA in the Chinese market.

According to the information we have, Dongfeng would be negotiating with PSA a purchase price of around 10 billion yuan, equivalent to 1.2 billion euros. Thanks to this investment, the Eastern company would become the largest shareholder of the French company, a role that until now had always been played by the Peugeot family. Should the operation go ahead, the Peugeot family would be relegated to second place in the shareholding with 25.5% of the company’s capital.

This operation would, at first glance, clash head-on with PSA’s previous plans, which had signed a collaboration agreement with the American General Motors. However, for GM this process poses no problem whatsoever, since they have stated that they never intended to become PSA’s sole partner, in which they hold 7% of the shares. Furthermore, it will not interfere with the development of the first joint PSA-GM model, which will hit the market in 2016. On the other hand, General Motors has the power to unilaterally dissolve the collaboration agreement if another company takes control of PSA.

Via | Automotive News