General Motors sells the 7 percent holding in the French car maker PSA Peugeot Citroen, as Peugeot plans to get more support from the Chinese partner Dongfeng Motors.
GM has invested €320 million last year as part of an alliance with Peugeot which should have generated savings for the two manufacturers through acquisitions and joint product development. The alliance scale was reduced, and Peugeot announced on Thursday that the savings will be 40 percent lower than previously anticipated.
“GM’s exit could make it easier at the end of the day to get a deal with Dongfeng, since GM and Dongfeng are direct competitors in China. But the timing is not ideal for Peugeot and raises questions about the future of their cooperation,” said Erich Hauser, an analyst with London based International Strategy and Investment Group.
GM will sell the package of 24.8 million shares it holds in Peugeot through a placement to institutional investors, announced the U.S. group. The deal is brokered by Goldman Sachs. The U.S. automaker’s asking price is between €10 and €10.25 per share, according to a source. GM’s stake was purchased in 2012 for 320 million.
GM stock fell on the U.S. stock market by 1 percent, to $40.05, while in Europe, Peugeot lost 7.6 percent to $10.63. Peugeot’s stock declined 22 percent this week.
French carmaker announced Thursday that currency fluctuations will have a €1.1 billion negative impact on profit in 2013, and savings generated by the alliance with General Motors will be lower than planned.
The change in the cooperation with GM and the losses made Peugeot to seek a closer cooperation with Chinese partner Dongfeng Motors to increase sales in emerging markets. The alliance with GM, focused on reducing costs in Europe, has limited potential because the two automakers compete largely for the same customers. Peugeot announced in October that it was considering a partial withdrawal from the alliance.
Reply