GM Cashes Out as Peugeot Chases China Deal
Shares of French automaker PSA Peugeot Citroën are tanking nearly 12 percent in Paris as General Motors (NYSE:GM) announced on Thursday that it would be selling off its 7 percent stake in the struggling manufacturer. The decision was based on Peugeot’s move to seek financing from its Chinese partner, Dongfeng Motor Corp.
“GM’s exit could make it easier at the end of the day to get a deal with Dongfeng, since GM and Dongfeng are direct competitors in China,” Erich Hauser, an analyst with the International Strategy and Investment Group, told Bloomberg. “But the timing is not ideal for Peugeot and raises questions about the future of their cooperation.”
General Motors and Peugeot were working on a handful of small-car platforms for the European market, though the relationship hasn’t been a very productive one, as both companies have experienced substantial losses in the region.