Dongfeng Motor Group, China’s second-largest automaker, has taken a stake in PSA Peugeot Citroen of France, worth 800 million Euros. The French government will take an equivalent stake. The purchase will give Dongfeng and the French government 14 percent each of Peugeot. The Peugeot family’s holding will be diluted to 14 percent from the current 25.5 percent. This means that the family will no longer be the controlling shareholders.
Dongfeng is expected to tap Peugeot’s technology, particularly its diesel engines, and the French company’s overseas markets. Peugeot gets the capital infusion after failing to record a profit since 2011. Dongfeng and Peugeot already have three factories in China. The deal is the largest investment by a Chinese automaker since Geely Motors bought Volvo Cars for $1.8 billion in 2010.
As for Peugeot Philippines, the effect of the ownership change is not expected to immediately affect operations. Eurobrands Distributor communications director Dong Magsajo (not related to Dongfeng Motors) commented, “We deal with the regional office in Malaysia and directly with Paris.”
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