The French automobile manufacturing company PSA Peugeot Citroen will no longer be dominated by Peugeot. This major player in the European car market has been the major share holder of the PSA Peugeot Citroen group for a long time now, but that period is soon to end.
The Dongfeng Motor Corp is the second largest automobile producer in China and they have agreed terms with the PSA to buy out a 14.1% share in the company. This will give them an even share with Peugeot in the company. The French government are also expected to buy a 14.1% share which will mean all three have this equal share in the company.
This 14.1% stake will cost the Dongfeng Motor Corp a whopping 800 million Euros and this is seen to be the largest foreign acquisition by a Chinese state owned company.
The sale is expected to go ahead before the 30th April 2014. This sale is expected to help PSA Peugeot Citroen to break into the Chinese market and other worldwide markets, which is an area they have struggled over the years.
Due to their large dependence on the European Market, this has led them to struggle over the past few years and was a major factor which led to this sale.
The chairman of PSA Peugeot Citroen Philippe Varin had this to say: “In 2014, Peugeot expects sales to grow about 2 percent in Europe and about 10 percent in China. The company plans to “increase its production capacity to 750,000 units in China by 2015 and to double its network of dealers in the Chinese market.”
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