According to people familiar with the matter China’s Dongfeng may be the French automakers last hope, as General Motors scaled back cooperation with Peugeot months into their alliance and later turned down a government-backed merger.
After the carmakers announced what was billed as a broad-based alliance in February of 2012, GM took a 7% stake in PSA Peugeot Citroen but the pair hit hit obstacles within eight months, when GM revealed its Chinese partner SAIC would veto key plans including for larger cars, said the sources, who declined to be identified because the matter was confidential. By June this year, Peugeot had won French government approval for a restructuring tie-up with GM’s Opel division, but the U.S. carmaker turned it down, citing CEO Dan Akerson’s likely succession by early 2015 and political sensitivities, people said. GM is still 7.3% U.S. government-owned.
The series of setbacks with GM has forced Peugeot Chief Executive Philippe Varin to look elsewhere for a cash injection amid mounting concern over the company’s finances. So enters the stage the reported preparing of a 3 billion euro ($4 billion) capital increase, in which Dongfeng and the French state would buy matching stakes of between 20 and 30%.
The move would reduce GM’s stake in Peugeot and give the Chinese state-owned carmaker access to its French partner’s technology, in return for help in potential new markets, according to people with knowledge of the talks.
) - Tuesday, October 15th, 2013 - filed under Citroen
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Discuss: Report – Dongfeng deal push set on scene by GM-Peugeot setbacks