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Dongfeng will spend 800 million euros to acquire 14.1% equity interest in PSA


February 16, Dongfeng Motor stakeholders confirmed that the company has been the acquisition of approximately 14.1% stake in PSA Peugeot Citroën (PSA) basic agreement, the transaction price of 800 million euros; Dongfeng Motor and PSA plans to sign a memorandum on February 18 memo, a formal contract will be signed in France on March 26.

 In addition, the reporter also learned that at the same time, the French government to € 800 million price of the acquisition of approximately 14.1% stake in PSA, PSA Peugeot shareholders layer thus forming a family, Dongfeng Motor, the French government of the three major shareholders holding shares in the same proportion of special situation. In addition, PSA has also implemented the original shareholders of financing, coupled with Dongfeng Motor and sold to the French government's equity trading, PSA to raise 3 billion euros of the total funding.

PSA in trouble due to the debt crisis, the amount of loss in fiscal year 2012 reached staggering 5.01 billion euros. According to PSA 2013 年 quarterly, the Group's average daily consumption of 7 million euros of funds, total net debt of about 30 billion euros. PSA sold since 2012, including the total value of real estate, equity interests in subsidiaries, including 1.5 billion euros of assets, and plans to close factories in France Ornette Coleman in 2014, in France, the abolition of 11,200 jobs. But sales continued to decline, dragged down, these measures did not fundamentally reverse its financial difficulties, PSA was in the hands of the French government's bailout, but the final choice of the restructuring of the road.

Mid-2013, PSA approached by investment banks and Dongfeng Motor. Dongfeng Motor establishment negotiating team leader Liu Weidong, deputy general manager of Dongfeng Motor as he served as general manager of Dongfeng Peugeot Citroen Automobile joint venture with PSA's. Negotiating team include multiple departments audit, legal, finance, deputy general manager in charge of strategic planning DPCA Tang Tang, Dongfeng Automobile Overseas Division responsible person is also a member of the negotiation team.

""Our value is not the acquisition of PSA stake, but the whole value chain collaboration, participation in the management of multinational companies to accelerate the globalization of Dongfeng Motor."" Dongfeng Motor insider told this reporter that the deal also includes a number of technical exchange, cooperation in terms of overseas markets, including the Dongfeng Motor Technology Center, PSA Peugeot Citroen Automobile R & D Center and the Asia-Pacific R & D center tripartite joint venture of a new R & D center.

Although negotiations took only about eight months, but the process is not smooth. French media reported that in January of this year, after the Peugeot family for fear of French government and joined Dongfeng Motor will cause dilution of its stake, thus advocated by the United States to come forward to guarantee JP Morgan Chase Bank, € 3 billion of financing from the market, as far as possible to the French government and Dongfeng Motor to sell the shares directly. But PSA Board rejected this proposition.

PSA planning two scenarios: The first set of programs is to maximize the PSA to invest in the stock market subscription, either east or the French government are free to subscribe for its equity; second PSA program then they are first issued shares to existing shareholders, issuance of additional shares of the market again. Dongfeng Motor aspects from the information provided by, PSA finally adopted a plan B.

It is worth mentioning that the Peugeot family not only lost the majority shareholder status, the ""double voting rights"" may also be abolished. People close to the headquarters of the French PSA told reporters, PSA and the French government, Dongfeng based on the ""same number tripartite shareholding limit the share of the Peugeot family participation, the abolition of double voting rights and the appointment of an independent chairman of the committee"" under conditions reached a unified opinion. ""After the acquisition, PSA's Supervisory Board, the Board will have members Dongfeng Motor, PSA Peugeot family by the Dongfeng Motor and French governments collective governance."" Dongfeng Automobile these people said.