Peugeot signs rescue deal with Chinas Dongfeng Motor - 19 February 2014

Struggling French carmaker PSA Peugeot Citroen has sealed a long-awaited rescue deal that will see its founding family cede control of the company. Chinas Dongfeng Motors and the French government will each invest about 800m euros (660m) in return for 14 stakes. Another 1.4bn euros will be raised from existing investors in Peugeot. The deal is still subject to a shareholder vote but will provide much-needed cash to keep Peugeot afloat after government guarantees expire. Should the deal be approved, the Peugeot familys 25.4 stake will be diluted to 14, matching that of the French government and the Chinese carmaker. Europes second-largest carmaker also announced its latest financial results on Wednesday, warning that it may face losses until 2016. Peugeot said its net loss narrowed to 2.32bn euros last year, compared to a 5bn-euro loss in 2012. Sales also fell by 2.4 from a year earlier to 54.1bn euros, due to tepid demand for new cars in Europe. There have been months of talks over the fate of the French carmaker, and reports say the deal is likely to be formally signed in March. In a statement to the Hong Kong stock exchange, Dongfeng said the deal is meant to expand and deepen their current cooperation with Peugeot. It also said the venture would strengthen overseas cooperation to achieve the objective of selling 1.5 million vehicles under the Dongfeng, Peugeot SA and Citron brands per year starting from 2020. Peugeot already has a joint venture with Dongfeng, which is one of Chinas newer car brands and is known for its heavy trucks and Fengshen line of vehicles. However, the new arrangement is expected to bring an increase in production and a new research and development centre. Dongfeng is also expected to promote the Peugeot brand in the fast-growing car markets in South East Asia. The deal also makes Dongfeng the latest Chinese carmaker to buy into a Western competitor. Last year, Zhejiang Geely Holding bought London black cab-maker Manganese Bronze Holdings for 11.4m after the company went into administration. Geely also bought Swedens Volvo brand in 2010. Peugeot was founded 200 years ago and is one of Frances oldest industrial dynasties. The company began in 1810 as a maker of tools and coffee mills, which are still marketed under its name. However, it has faced financial difficulties and shrinking market share over the last few years. TAGS: abc breaking news, bbc, bbc football, bbc iplayer, bbc news, bbc news america, bbc persian, bbc sport, bbc weather, bbc world news, breaking celebrity news, breaking election news, breaking late news, breaking local news, breaking music news, breaking news, breaking news alerts, breaking news canada, breaking news headlines, breaking news in atlanta, breaking news in nigeria, breaking news india, breaking news pensacola florida, breaking news plane crash, breaking news story, breaking sports news, business expensive news home media world, christian world news, cnn, cnn breaking news, cnn money, cnn news, cnn news breaking news, cnn news world, detroit breaking news, global news, headline, headline news, health care technology news, hot latest global news, internet technology news, las vegas breaking news, latest breaking news, latest celebrity news, latest information technology news, latest music news, latest news, latest news headlines, latest news update, latest sports news, live breaking news, local breaking news, local news today, msn breaking news, nbc breaking news, nbc world news, news of the world, news report us world, news today news, news updated daily, solar technology news, sports news today, technology news, the latest news, today news, us news and world, us news and world report, us news and world report magazine, us news and world report web site, us news world report, world news, world news daily, world news headlines