Link to transaltion {http://bit.ly/18nt75J} Link to french article {http://bit.ly/1aR1jmA}
PSA Peugeot family agrees to continue discussions with Dongfeng
Talks between PSA Peugeot Citroen and Dongfeng Chinese group for an input of the latter capital manufacturer automotive French will be able to continue - it's one of the options for saving PSA medium term. According to Les Echos on Wednesday, November 20, a special supervisory board of French society, met Monday endorsed the continuation of initiated by the management with the Chinese manufacturer negotiations. The Monde.fr is pleased to offer reading this article usually reserved for subscribers Monde.fr. Enjoy all items reserved for the Monde.fr you subscribe from 1 € / month | Discover edition subscribers
This means that the family Peugeot , rumors say deeply divided in recent weeks, agreed at this stage to open the group's capital to the constructor of Wuhan and the French State, as also mentioned the Reuters.
According to the assumptions its studied PSA would launch a capital increase subscribed equally by Dongfeng and state. It would, according to confirmed information in the world, a total of 4 billion euros. This would double the current share capital.
In exchange for this contribution, Dongfeng and each state would get 30% share of the French manufacturer. The Peugeot family, which currently owns a quarter of the shares, but 38% of the voting rights, would share in the capital of the company returned around 12.5% if it does not participate in the capital increase.
Although she handed the pot, the family would lose anyway group management. Today, Thierry Peugeot who presides over a company that is over two hundred years in the family fold. "We're not there yet, said a source.'s Peugeot have agreed to formalize strategic discussions with Dongfeng, but nothing is yet done, nor signed. "
But PSA is now at an impasse. It is too small, too general and too focused on Europe . He risk of being in the medium term, distanced by Toyota, General Motors, Volkswagen, Renault -Nissan and Hyundai or Fiat-Chrysler groups that accelerate their investments.
The French manufacturer is pressed for time. If reduced its losses quarter after quarter, the debt grows and its credit rating, which weighs on the borrowing requirements of the bank deteriorates. It also needs in the medium term, an injection of cash to make its technology investments. And it is precisely because the Peugeot family begins to understand the strategic stalemate in PSA is she decided to jump on it.
"INEVITABLE"
Yet all was not as easy, it seems, in recent weeks. Some have even been ready, according to a source, sabotage negotiations with Dongfeng to remain at the head of the company or to make from Philippe Varin, Chairman of the Board.
"This attitude was suicidal, according to one expert group. It took time, but the family eventually understand that opening capital partner is inevitable. "Also, remember a source close to Peugeot," they can have significant disagreements internally, they always end up finding a common position. "
Besides family, PSA management must still convince Dongfeng s' engage quickly. However, it does not seem rushed. The Chinese group, for its part, does not have a knife to her throat. It seeks an industrial agreement to develop its own brand. The French manufacturer has its counterpart access to some of its technologies and common development in the region Asia Pacific . PSA particular facilitate the deployment of the input range of Dongfeng brand in Asia.
Limit the entry strategy of the Chinese capital group PSA is that it does not allow him to see his volumes of cars increased significantly because he wants to significant economies of scale.