| 10:07 AM EST

Report: Dongfeng to Cut Stake in PSA

Dongfeng Motor Group will reduce its stake in PSA Group to help the French carmaker clear U.S. regulatory hurdles ahead of a planned merger with Fiat Chrysler Automobiles.
#asia #Chrysler #Dongfeng

Share

Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

Dongfeng Motor Group will reduce its stake in PSA Group to help the French carmaker clear U.S. regulatory hurdles ahead of its planned merger with Fiat Chrysler Automobiles NV, Reuters reports.

The Chinese carmaker’s stake in the combined PSA-FCA venture would be about half of its current 12.2% stake in PSA. But the reduced holding still might raise U.S. national security concerns amid the ongoing trade tensions between China and the U.S.

Reuters suggests that lowering ownership to less than 5% would make the deal more palatable. A larger stake would likely give Dongfeng a seat on the board of the new company.

Dongfeng solicited divestiture proposals from banks several weeks ago, sources tell the news agency. Such a plan could be presented to the Chinese carmaker’s board of directors within a few days.

PSA and FCA announced the 50:50 merger plan in late October and hope to sign a binding agreement this month. The $50 billion deal would create the world’s fourth-largest carmaker with annual sales of 8.7 million vehicles.

In addition to its equity stake in PSA, which Dongfeng acquired in 2014, the two companies operate a joint venture in Wuhan, China. The partners announced plans in September to restructure the company, called Dongfeng Peugeot Citroen Automobiles.

Related Topics

RELATED CONTENT

  • Ford Makes an Astounding Achievement

    Ford has made an accomplishment that will never be bested, never even be tied.

  • The Changing Definition of 'Niche Vehicles'

    Once the playground of exotic car makers, the definition of a niche vehicle has expanded to include image vehicles for mainstream OEMs, and specialist models produced on high-volume platforms.

  • Designing the 2019 Ram 1500

    Ram Truck chief exterior designer Joe Dehner talks about how they’ve developed the all-new pickup. “We’ve been building trucks for over 100 years,” he says. “Best I could come up with is that this is our 15th-generation truck.”