General Motors sells its share in PSA for $250 million, but both companies will continue with their joint-venture projects
Darren Moss
13 December 2013

General Motors has sold its seven per cent stake in PSA Peugeot Citroën for $250 million (around £153 million).

The two companies will continue to work together, though, and will push ahead with plans to merge production of their respective compact MPV and SUV models onto a PSA platform.

Existing joint-venture projects will continue as well. The planned new B-segment MPV will be built at GM's Zaragoza plant in Spain, while a new C-segment crossover model will be built by PSA's Sochaux plant in France. The first vehicles from that project are expected to be seen in 2016.

Vice chairman Steve Girsky said: "Our equity stake was planned to support PSA in their efforts to raise capital at the time of the creation of the GM and PSA alliance, and that support is no longer needed.

"The alliance remains strong with our focus on joint vehicle programmes, cross manufacturing, purchasing, and logistics. We’re making good progress while remaining open to new opportunities.”

Initially it was believed the Peugeot family would step back from its position within the company to allow GM complete control of PSA. Peugeot revealed a £4.3 billion loss in the 2012 financial year, alongside automotive revenues which fell by over 10 per cent. 

PSA stock fell by as much as 8.3 per cent yesterday following the announcement of GM's sale. Analyst Sascha Gommel told Bloomberg: "The sale is a surprise and reflects negatively on the GM-Peugeot partnership.

“On the other hand, it signals that the negotiations with Dongfeng are well advanced and that a deal is more likely."

PSA has been in a number of talks with the Chinese manufacturer Dongfeng in recent months, with the latest reports suggesting a stake sale is imminent. Both Dongfeng and the French government are likely to invest around £1 billion each in PSA, in exchange for owning between 20 and 30 per cent of the company. If that happens, the Peugeot family would lose control of the firm, as they would have to surrender voting rights and dilute their 25.4 per cent stake.

GM also announced this week that it would axe Chevrolet's operations in Europe and would be closing all manufacturing operations in Australia and New Zealand by 2017.

GM was unable to comment on the situation in the UK at the time of writing.

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Comments
9

13 December 2013
"PSA. Peugeot revealed a £4.3 billion loss in the 2012 financial year" my god no wonder GM dropped them, just as well the French goverment have deep pockets, but for how long???

 

Hydrogen cars just went POP

13 December 2013
It's withdrawn Chevrolet from Europe - it's withdrawn manufacturing from Australia which will decimate sales there - now it's pulled out of an alliance with PSA - where will it all end? Actually the GM-PSA alliance is one I never saw the point of for GM anyway - unless it was simply to stop Fiat getting it.

13 December 2013
@Ruperts: The Holden Commodore only sold around 30,000 units last year and it's doubtful it will recoup its investment in the latest model. Chevrolet sold nearly 200,000 vehicles in Central and Western Europe last year, but their sales in Europe this year are down by 30-40% compared to last year and they will have well under 1% of the market. Meanwhile Vauxhall/Opel has nearly 7% of the market with European sales of over 1m units annually, and GM sells well over 2m units p/a in the US market. But you are right, the alliance (as structured) with PSa didn't make sense. The only way that was going to work was by a far more committed merging of operations - i.e. a sale of PSA to GM or GM-Europe to PSA.

13 December 2013
If Dongfeng take a stake in PSA then the technical partnership will end too - there's no way GM will let any of their technology leak across to the Chinese to compete witht heir own interests in China, which are considerable (and relatively successful). As for PSA, what future will is have when it's major shareholders are the French Government (whose interest will be in protecting French jobs) and Dongfeng (whose interest is in getting access to platforms, engines and technology to exploit in the Chinese market). That combination will certainly lead to some interesting Board meetings..........

13 December 2013
In what hilariously debased currency, I wonder, is PSA worth £2,185,714,290?

13 December 2013
[quote=Bullfinch]In what hilariously debased currency, I wonder, is PSA worth £2,185,714,290?[/quote] :)

13 December 2013
[quote=Bullfinch]In what hilariously debased currency, I wonder, is PSA worth £2,185,714,290?[/quote] Sterling, it would appear!

13 December 2013
[quote=artill][quote=Bullfinch]In what hilariously debased currency, I wonder, is PSA worth £2,185,714,290?[/quote] Sterling, it would appear![/quote] Green Shield Stamps, more like. Or Lire.

14 December 2013
then the Holden and now the GM off-loads Peugeot shares. Whatever the outcome for Peugeot things aren't looking up for the GM. I guess it is time for VW to move up a rank in the global sales.

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