Peugeot Citroen In Chinese Tie-Up Confirmed
It is the end of an era for a family owned car business that has been around since the days of steam-powered vehicles.
A rescue package has been announced for the struggling French carmaker Peugeot Citroen, which will see the founding family lose their controlling stake.
The deal will see Chinese state controlled car company Dongfeng and the French government each inject ?800m (£650m) into the firm.
Both will then get 14% stakes in return.
It will dilute the Peugeot family's holding in the 118-year-old company, which initially made coffee grinders and bicycles, to the same level.
The announcement was made as it reported a full-year operating loss of ?1.3bn (£1.1bn) for 2013, down from a ?4.7bn (£4.29bn) loss in 2012.
Full-year revenues were down 2.4% to £42bn - roughly the same as what it earned in 2008 - with new car revenues down 8% at ?25.5bn (£21bn).
The company, Europe's second largest car firm, said it had seen "excellent performance in China" where its existing Dongfeng joint venture has seen sales up 26% to 550,000 vehicles.
Peugeot admits it is currently too reliant on the languishing European market and lagging behind competitors in developing new markets.
The family's 25% holding and its 38% voting rights will be diluted and no party will have a majority stake - averting veto powers.
Financial Times motor industry correspondent Henry Foy told Sky News the Chinese investors will get valuable R&D capabilities.
He added that the French government stake is seen as a counter-balance in the tie-up which is already seen by some critics as a "three-headed monster".
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