French carmaker PSA-Peugeot Citroen has finally signed a contract to sell 75 percent of its Gefco logistics business to Russian Railways.
Russia’s state monopoly will have pay €800 million ($1.03 billion) to buy Gefco, as Peugeot initially announced on September 20. The French carmaker said that Gefco would first pay a special dividend of €100 million to Peugeot.
“The completion of the transaction is now exclusively subject to relevant antitrust approvals and should take place before the end of the year,” Peugeot announced on Monday.
The deal is part of Peugeot’s plan to reduce debt and cut losses as it struggles with overcapacity and a weak European market. On the other hand, Russian Railway’s interest in Gefco is simply a part of the Russian state’s policy of diversifying away from oil and gas. The world’s largest country by area wants to develop its manufacturing base, according to plans initiated by president Vladimir Putin.
Russian Railways operates the world’s second-largest rail network and employs 1 million workers. The company’s annual sales amount to $40 billion.