Report – PSA to sell Faurecia in wake of Dongfeng tie-up image

Several sources with knowledge of the situation said the French carmaker PSA Peugeot Citroen is preparing for a possible sale of its Faurecia components division to accompany the tie-up with China’s Dongfeng Motor Group.

The separately listed parts maker has hired an adviser to explore the sale of Peugeot’s 57 % stake either in the market, or to a private equity fund or industry peer, said the sources, who asked not to be named because the talks are private.

Discussions are at a very preliminary stage, they said, and remain conditional upon the success of complex negotiations on Peugeot’s deeper tie-up with its existing Chinese partner.

Talks on the 3 billion euro ($4 billion) capital increase, in which the French government and Dongfeng would each acquire 20-30 % of Peugeot, are still progressing more slowly than the troubled carmaker initially hoped. The French carmaker is “very eager” to sell a significant stake to its Chinese partner, but Chairman Xu Ping is not yet convinced, a source close to Dongfeng said.

At the moment, Peugeot is reluctant to sell Faurecia because the profitable company, which is based in the western Paris suburb of Nanterre and has a market value of 2.5 billion euros, helps to support the carmaker’s credit rating.

Via Reuters