PARIS – 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 per cent 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.