General Motors will sell its 7-percent holdings stake -- equivalent to 24.8 million shares -- in PSA/Peugeot Citroen through a private placement to institutional investors. GM acquired the shares in February 2012 for around $400 million as part of a partnership with PSA.
“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,” GM Vice Chairman Steve Girsky said in a statement. He remarked that their alliance remains strong, with focus on joint vehicle programs, cross manufacturing, purchasing, and logistics. He added that they are making good progress while remaining open to new opportunities.
GM also announced that it has further downsized the scope of the PSA alliance, getting rid of plans to co-develop a common platform for subcompact cars as well as a small, three-cylinder engine. GM now sees the alliance to result to $1.2 billion in cost savings annually by 2018, down from an initial projection of $2 billion.
The savings will be split evenly between the two carmakers. GM and PSA will still co-develop two disclosed models underpinned by PSA platforms -- a small multi-purpose vehicle and a mid-sized crossover. PSA and GM will also work on a new generation of small commercial vehicles, also based on a new PSA platform.