Peugeot Citroen close to Chinese investment dealJanuary 20, 2014 @ 11:08 am
PARIS (AP) - Out with General Motors Co., in with China's No. 2 automaker: PSA Peugeot Citroen is moving closer to a partnership with Dongfeng Motor.
Spokeswoman Antonia Krpina at the capital-hungry French automaker said Monday its supervisory board has reached "cohesion" in talks announced last month involving Dongfeng. She declined further comment, saying no deal has been signed yet.
In a statement later, Peugeot Citreon said negotiations are ongoing and it expects to make an announcement next month at its annual earnings presentation.
Peugeot Citroen said its "privileged scenario" foresees a capital increase of around 3 billion euros ($4.1 billion). The deal also could see the French government take a matching stake in the company alongside Dongfeng.
Last month, Detroit giant GM said it had decided to unload its 7 percent stake in the struggling French company, without disclosing a price, while maintaining their alliance.
Many acquisitions and corporate partnerships abroad by Chinese companies aim to improve their competitive edge in their fast-growing home market. A Peugeot tie-up would give Dongfeng access to a well-known brand and advanced technology to help expand its share of the world's biggest auto market.
(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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