PSA Peugeot Citroen’s supervisory board agreed to sell stakes to Dongfeng Motor Corp. and the French state as part of a move to raise 3 billion euros ($4.11 billion) to fund a turnaround, two people familiar with the matter said.
PSA Peugeot Citroen’s deal to sell stakes to France and Dongfeng Motor Corp. may end up trading a cash influx for a shareholder structure that threatens to hobble the manufacturer’s decision-making, analysts said.
PSA Peugeot Citroen hired former Renault SA executive Carlos Tavares to lead the French manufacturer out of a six-year slump in European demand that has sapped the finances of the region’s second-biggest carmaker.
PSA Peugeot Citroen’s move to name former Renault SA operations chief Carlos Tavares as its future chief executive officer stands to help secure an alliance with Dongfeng Motor Corp., which may be the carmaker’s last chance to end its reliance on Europe’s slumping car market.
PSA Peugeot Citroen, Europe’s second-largest carmaker, said it may help General Motors Co. develop smaller models while gaining its partner’s expertise in sport-utility vehicles as the manufacturers’ alliance expands.