As speculation over the capital increase and poor sales figures for September have driven Peugeot shares down 20% so far this week, the French government is discussing for the first time taking a stake in Peugeot Citroen to protect the country’s industrial interest amid the worst European car market in two decades.
The state’s intervention would be in response to a deal under discussion between PSA Peugeot Citroen and carmaker Dongfeng about a capital injection by the Chinese group, which is already a partner producing cars in China.
According to people close to the discussions the government is weighing up taking a stake itself, which would help to inject more money and also maintain French control, because any stake taken by the Chinese would be politically sensitive.
“The French government has looked at what the US has done with the US automakers and the success of that since and as such, if needed, are ready to provide similar assistance,” says a person with knowledge of the talks.
A Chinese newspaper last week said Dongfeng was in talks over a €3bn capital injection, citing a single source. An injection near that size would almost certainly result in the Peugeot family losing control of the business it founded in 1882. The family has a 25% stake but 38% of the voting rights.
Via Financial Times
) - Thursday, October 17th, 2013 - filed under Citroen
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Discuss: France protects the French – it’s PSA’s turn now