Currently reading: PSA Peugeot-Citroën stake sale 'imminent'
Peugeot-Citroën reported to be on the verge of a part-sale to Chinese Dongfeng motor company and the French government
2 mins read
12 October 2013

PSA Peugeot-Citroën will sell a substantial stake in its business to Chinese Dongfeng Motor and the French government, according to reports.

News agency Reuters says the deal could be signed this month, with both Dongfeng and the French government investing around £1 billion in PSA in exchange for owning between 20 and 30 per cent of the company. As a result, the Peugeot family would lose control of the firm, as they would have to surrender some voting rights and dilute their 25.4 per cent stake in the business.

A Peugeot spokesman told Reuters: "Peugeot confirms it is studying new industrial and commercial projects with different partners, as well as the financing to accompany them. None of these plans have yet reached an advanced stage."

Dongfeng already operates as PSA's Chinese partner, and the two companies already operate three assembly plants in China. The firm recently denied a deal was in the offering, telling Chinese media it was still doing 'preliminary research' into investing in PSA.

This potential move by Dongfeng could provide a headache for PSA's partnership with General Motor's Opel-Vauxhall brands. GM already owns a seven per cent stake in PSA and the two have just announced plans to merge production of their respective compact MPV and SUV models onto a PSA platform.

PSA's financial troubles have been well documented, with the company revealing a £4.3 billion loss in the 2012 financial year alongside automotive revenue falling by over ten per cent.

That was followed with news in June that the Peugeot family could step back to allow GM to take over the company. It was widely felt that the Peugeot family announcement was intended to underline the seriousness of the car maker's financial position.

Any deal between Dongfeng and PSA will also face domestic hurdles, as PSA is currently in talks with unions - reputedly to reduce overtime pay and freeze salaries in exchange for more French production and investment. Any deal would require those talks to be completed.

Darren Moss & Hilton Holloway


Find an Autocar review

Join the debate


9 October 2013

Oh dear! Sad

9 October 2013

This would seem to be a far from 'done deal' as PSA have to get so many things in place before it can go ahead - not least union agreement and the probably bigger obstacle of GM and their stake in PSA plus future collaboration (and let's face it GM don't have good record in agreeing deals involving the chinese - think SAAB) - so it is probably too early to give an dismayed verdict right now.

I think I'd feel relatively optimistic in view of the recent product re-alignment that both Peugeot and Citroen have talked about, and if extra cash from China and an increased possibility, through joint-venture penetration of the massive Chinese market, keeps them afloat long enough to implement their plans in full, that can only be positive. Good luck to them (even if they are French !)

9 October 2013

As GM only own a minority share in PSA (7% reported), PSA do not need their permission to sell shares, with SAAB, GM had controlling ownership so what they said went.

9 October 2013

While on the face of it, the news comes across as bad for the European car industry, in particular the French, yet it could potentially be a positive development, especially if the sale of shares gives the French marque a good access to the ever expanding Chinese car market, in addition to the much needed cash injection that Peugeot could certainly do with.

9 October 2013

The most shocking thing about the story is that this values PSA at only £3bn!

That might sound like a lot, but considering their current market capitalisation is over £4bn and that it costs at least £1-£2bn to develop a new car family these days, that's disturbingly low.

9 October 2013

Do we really care who owns who? The Chinese owning Volvo hasnt done them any harm. The Indians owning JLR appears to have been good news.

I know that the last 10 years has seen Peugeot make some of the worst cars they have ever made, and Citroen arent that much better. Things are improving now, but maybe a chunk of Chinese cash and some better management is just what they need.

I think we need PSA to survive because the market needs the competition, but unless they are making good cars i dont see the point. Maybe the Chinese can help things change?

12 October 2013

At least, the Qatar will not be alone in France...

12 October 2013

...the Chinese will be paid several billion euros by the French to take a chunk of PSA?

That would be a real coup if the French can pull it off.

But just what will the French find to waste their taxes on now?

13 October 2013

It is all "reported" and "could" as "stuff" obtained via Reuters has a habit of being. Better wait to see if anything of this actually transpires.

15 October 2013

The investment from China is almost certainly good news for PSA.

The investment from the French Government (who intriguingly seem to be getting a better deal than the Chinese is almost certainly a really bad idea. Take the money and PSA will find it harder to close factories, sack workers and make their manufacturing profitable again.

Add your comment

Log in or register to post comments

Find an Autocar car review