Dongfeng wavering on PSA Peugeot Citroen investment

October 27
9:27 AM 2013

Dongfeng Motor Group of China is reviewing the pros and cons in investing in PSA Peugeot Citroen, according to a Dongfeng executive. The executive said a deal with the French automaker may take some time before being finalized.

PSA is now in preparations for a EUR3 billion capital raise through the contributon of EUR1.5 billion each from Dongfeng and the French government. In exchange for the financing, they are to acquire between 20% and 30% of the troubled carmaker. This was confirmed by sources with direct knowledge of the matter with Reuters earlier this month. 

The sources added Peugeot hoped to complete the deal by year's end. The recent weekend though had a different wind blowing, as Dongfeng General Manager Zhu Fushou making a statement saying that the second largest carmaker is in no hurry to finalize the investment.

Zhu said, "If we can completement each other's advantage, if we can achieve synergies, we may go ahead to do it. Otherwise, we would do it. As a partner, we are surely concerned about the overall business of PSA. Last year, it made a net loss of EUR5 billion or USD6.90 billion."

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