Peugeot Agrees Deal With GM to Save $2 Billion
Jessica Menton | Mar 1, 2012 7:39am EST | 1min:08sec
PSA Peugeot Citroen has agreed to form an alliance with General Motors targeting $2 billion in savings, sources with knowledge of the discussions said on Wednesday. GM will take a 7 percent Peugeot stake as part of a share issue by the French automaker, and the two companies will pool research and development, vehicle platforms and technologies.
The agreement is to be announced after European markets close later on Wednesday. Peugeot shares, which had earlier lost as much as 4.2 percent on concern that the GM talks could have hit a sticking point, rebounded and were up 0.5 percent in late afternoon trading. GM shares, which have dropped 4.4 percent since the alliance plan was first reported by a French newspaper on February 21, edged 0.1 percent lower.
Peugeot declined to comment. The deal, which comes as both Peugeot and GM's Opel unit grapple with slow sales and overcapacity in Europe, has met with widespread skepticism among analysts and investors.
