PSA/Peugeot Citroen could take a 50% stake in Mitsubishi

Article by Christian A., on August 26, 2010

Just to be able to ride out the slump that the auto industry has been reeling from, France's PSA/Peugeot Citroen SA could buy a large stake in Japan's Mitsubishi Motors Corp. as part of a plan to deepen ties.

Shares of Mitsubishi then closed 13.4% higher after the Nikkei business daily reported that PSA, Europe's second-biggest carmaker, may take a 30%-50% stake in Mitsubishi Motors for up to 300 billion yen ($3.4 billion). 

Peugeot shares also went up by 0.4%. In an interview with LCI television, French Finance and Economy Minister Christine Lagarde said that since there is overcapacity in the car sector, consolidation may be necessary.

She calls the talks between Peugeot and Mitsubishi to be "a good thing." A partnership could create a leader in electric vehicles. Mitsubishi even went as far as to say that a capital tie-up was possible. However, there is still no word on how long the negotiations will last.

The Nikkei reported that top management at Mitsubishi is prepared to accept a majority acquisition of the company by Peugeot if conditions were right.

CM-CIC analyst Guillaume Angue asserted that the alliance would make sense from an industrial viewpoint and it would allow Peugeot to solve its problems of size, but that it would come a bit early in the business cycle.

In his estimation, Mitsubishi remained expensive with an enterprise value to sales ratio of 0.64 against 0.2 at Peugeot. [via autonews - sub. required]

If you liked the article, share on:

Comments

Recommended

Like it or not, Chevrolet may soon be offering a cheaper Camaro in hopes of competing with Dodge Challenger and Ford Mustang GT. Apart from the less expensive trim, the...
by - August 17, 2017
Recently, Porsche revealed a new Macan Turbo wearing a Performance Package and a unique Porsche Motorsport themed paint. At first look, it will remind you of the 919 Hybrid and...
by - August 17, 2017
The BMW M1 will be one of the most exclusive cars that will be showcased at the upcoming 2017 Pebble Beach Concours d'Elegance, alongside many other extravagant models. Firstly, there...
by - August 17, 2017
Aston Martin Vanquish Zagato makes its debut with a total of four variations including the Speedster and the Shooting Brake trims. As part of the limited edition model, the company...
by - August 17, 2017
Mitsubishi finally introduces the new Xpander MPV at the 2017 Indonesia International Auto Show in Jakarta Indonesia. Replacing the previous Expander, the new multipurpose vehicle will be mostly sold at...
by - August 16, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries