Sources are telling Reuters that negotiations over a proposed $4.11 billion tie-up between Dongfeng Motors and PSA Peugeot Citroen, backed by the French national government, are going more slowly than the French automaker had hoped. PSA now hopes to have a non-binding deal with Dongfeng outlined by late November, a month later than it expected only a week ago. A final deal would be signed in early 2014.
According to reports last week, the French government and Dongfeng would each take a 20-30% stake in PSA in exchange for an infusion of as much as 3 billion euros into the struggling automaker. Reuters’ sources say that a delegation including Peugeot execs and representatives from APE, the French agency that manages government holdings, met with Dongfeng officials in Beijing last week. Apparently, Dongfeng is taking a firm stance on price and is not in any hurry to invest the money, so the talks weren’t as productive as PSA had hoped.
At the same time, Peugeot is moving ahead with the plan to sell part of Banque PSA, the company’s car financing arm. Sources say that Santander is considering buying a 50% stake in Banque PSA. Other banks are interested in acquiring Banque PSA’s operations in individual European countries.
A partial sale of BPSA could help win EU approval for the French government’s investment in its parent automaker.
