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Dongfeng, French government to invest in Peugeot
Chinese automaker Dongfeng and the French government are each investing 800 million euros ($1
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hinese automaker Dongfeng and the French government are each investing 800 million euros ($1.1 billion) in Peugeot, throwing a financial lifeline to the struggling French auto brand and possibly expanding its global presence.
Plans call for Dongfeng Motor Co., the French government and the Peugeot family each to own equal shares in PSA Peugeot Citroen and to have equal voting rights, Dongfeng said in a statement Wednesday.
The deal reflects an increasingly popular strategy among Chinese companies, which are buying stakes in established foreign brands to improve their competitive edge in their fast-growing home market.
China's auto market is the world's biggest by number of vehicles sold but is crowded and competitive, with every global brand and two dozen indigenous automakers jostling for sales.
Dongfeng said the French government is expected to buy the same number of shares as it on the same terms. That would bring Peugeot at least 1.6 billion euros ($2.2 billion), less than the 3 billion euros ($4.1 billion) it said earlier it hoped to raise.
Dongfeng said it and Peugeot will expand cooperation in technology, research and development, manufacturing and overseas distribution. It said the two sides will sign a formal agreement in March and continue work on their strategic partnership.
