According to sources talking to Reuters, the founding family of PSA Peugeot Citroen has agreed during yesterday’s meeting to allow the 3 billion euro ($4.1 billion) alliance with China’s Dongfeng and the French state.
Citing two people who were familiar with the situation, Reuters reports that both boards of the Peugeot family holdings, Etablissements Peugeot Freres and the FFP subsidiary agreed on the capital increase plan that would effectively mark the end of one of France’s oldest industry dynasties.
According to one of the sources cited, “all of the proposals” that were negotiated by PSA with Dongfeng were approved, which means both the Chinese automaker and the French government would take matching stakes in the automaker of around 14%. PSA’s board of directors needs to approve the plan on a meeting due today, while the agreement would be immediately announced the following day.
The sources also said PSA’s plan would see new stock issued for Dongfeng and the French state, with a selling price of just 7.50 euros, a good 41 % lower than Monday’s 12.79 euro closing price, followed by a rights issue to existing shareholders.
Other sources also said the Banco Santander separate agreement was also approved and should be announced together with the capital expansion plan.