PSA confirms negotiations with Dongfeng over capital hike

Article by Anita Panait, on December 13, 2013

PSA/Peugeot-Citroen is considering new commercial and industrial projects with partners like Dongfeng Motor Group, as supported by a capital increase. In a statement, PSA said that the discussions are still at a preliminary stage and "no assurances can be given as to their conclusion." It said that there is no agreement on the terms of a potential operation.

A source privy with the matter told Reuters that PSA's board has approved a draft alliance plan this week wherein Dongfeng and the French state would acquire large minority stakes at a 40-percent discount to PSA's current share price. The board also agreed to enter final negotiations on a EUR3.5 billion ($4.8 billion) share issue that would lead to France and Dongfeng taking 20 percent stakes, the source said.

The capital hike would be priced at below EUR7 per share, and at a low of EUR6.85 in indicative offer from Dongfeng. Financial Times recently reported, citing anonymous sources, that PSA and Dongfeng are planning joint production of small cars for Southeast Asian markets, underpinned by a transfer of still specified technologies.

PSA is one of the carmakers heavily struggling in Europe, no thanks to the current slump in the region. PSA is cutting jobs and capacity to put an end to its losses. Outgoing CEO Philippe Varin has disclosed that the French carmaker is exploring a deeper relationship with Dongfeng.

Topics: psa, dongfeng

If you liked the article, share on:


Login or Create new account to add a comment!


We’ve seen quite a lot of intriguing stories in the age of Internet (where the most interesting part was revealed before the story unfolds). Some are from movies and novels...
by - October 26, 2016
Many people have long known that the new 2018 RS5 was being developed by Audi AG. Enthusiasts the world over were excited when a prototype was seen running on the...
by - October 26, 2016
It was only recently when BMW officially debuted the new 2017 5-Series Saloon (G30) online. At that time, this range revealed that it had driving dynamics that was the best...
by - October 26, 2016
Starting early 2017, the new Audi Q7 will be available with the new 2.0-liter TFSI four-cylinder engine that makes it not only faster but also lighter and more efficient than...
by - October 25, 2016
Soon, Fiat Chrysler’s Dodge brand will be ending the production of the Dodge Viper. So practically, the 2017 Dodge Viper will be the last Viper up for grabs. Gerry Wood...
by - October 25, 2016