Peugeot in talks with Mitsubishi for 30-50% stake image

PSA Peugeot Citroen is in talks to spend up to 300 billion yen ($3.4 billion) to acquire a 30-50 percent stake in Japan’s Mitsubishi Motors Corp, the Nikkei business daily reported on Thursday.

A Mitsubishi Motors spokesman Tetsuji Inoue said the report was not true. Peugeot, Europe’s second-biggest carmaker, was not immediately available for comment.

The Nikkei said the two companies are in the final stages of negotiations, with Peugeot seeking a stake of at least 50 percent in Mitsubishi through the placement of new shares, effectively placing the Japanese automaker under Peugeot’s control.

Mitsubishi may also potentially buy an interest in Peugeot, it said.

While a new share issuance could be authorised at a board meeting, given that Peugeot would gain management control, Mitsubishi would seek approval for the deal at a shareholders meeting to be held in June, the paper said.

Earlier this year, the two carmakers had agreed to cooperate in developing and marketing electric cars.

Mitsubishi Motors plans to use the money raised through the stake sale to Peugeot to buy back preferred shares issued to Mitsubishi UFJ Financial Group, Mitsubishi Heavy and other Mitsubishi companies, the Nikkei said.

The Tokyo stock exchange suspended trade in Mitsubishi Motors following the newspaper report.