PSA Negotiating with Dongfeng Over 30% Sale

The China Business News is reporting that insiders within Dongfeng are negotiating with PSA -CitroënCitroënFrance, 1919 > present94 models
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to buy 30% of the company. The newspaper reports that the stock would be sold for 10 billion yuan ($1.63 billion), but the two sides are still negotiating. PSA’s only comment is that it is looking into industrial development projects, but it had not admitted to working with Dongfeng on a stock sale.

"We have a partnership with Dongfeng and we are looking at how we can expand it, but nothing more has been decided," said a PSA spokesperson.

The rumors that PSA was speaking with Dongfeng began last week, and PSA would use the money for further expansions outside of Europe.

The PSA and Dongfeng joint venture includes three factories in China.

PSA’s downward spiral has been happening since last year. General MotorsGMUnited States of America, 1998 > present8 models
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bought 7% of the company last year and were negotiating to merge Opel and Vauxhall into it before PSA took a government bailout that changed the structure of the board of directors.

In the first half of 2013, PSA has a €510 million loss. Its solution to the problem has been to close factories, lay off workers and attempt to broaden outside of Europe.

Source: Automotive News Europe