Peugeot-Citroen is claimed to soon announce a 14 per cent, $4.1 billion sell-off to Chinese brand Dongfeng.
Following ongoing negotiations over the past six months, Reuters reports that directors from PSA Peugeot-Citroen approved “all of the proposals” with Dongfeng that would exactly match the French government’s stake in the brand.
It is believed the deal has resulted in PSA giving both Dongfeng and the French government a 40 per cent discount on its stock price – at 7.50 Euro, down from Monday’s 12.79 euro closing price.
The Peugeot family’s stake in the brand would be reduced to an identical level with both Dongfeng and the French government, marking the first time in the ailing car brand’s history that its original owners would not have a controlling stake and the right to veto company decisions.
PSA is currently being kept afloat by seven billion Euros in government guarantees, Reuters reports, but that deal is due to expire next year.
Particularly following the collapse of buy-out talks with General Motors, the deal with Dongfeng includes a huge injection of capital to keep the brand alive amid sizeable losses thanks to European sales downturn.