With PSA Peugeot Citroen and China’s Dongfeng Motors finally reaching an agreement on the 3 billion euro capital tie-up, an official of the French state also confirmed their involvement in the deal.
It’s been widely reported on the matter, so we all know that PSA needs a fast capital infusion to try and bring back its business to a competitive stance, after it burned faster than expected through its available cash in recent years.
Because of its bigger dependence on the European region, PSA, which is also the region’s second biggest carmaker behind Volkswagen, has been deeply affected by the recent six-years economic slump that triggered a huge fall in new car sales.
Now, with a new management pending, as former Renault second in command Carlos Tavares will replace Chief Executive Officer Phillipe Varin when the deal completes, PSA will also get out of Peugeot’s family control after two centuries.
France’s Industry Minister confirmed the state would extend its support to the carmaker, acquiring a Dongfeng equal 14% stake in PSA Peugeot Citroen in exchange for 800 million euros ($1.10 billion) in cash.