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UNITED STATES : GM to pay US$423m for Peugeot stake
Publish Date : 07-Mar-2012
General Motors Co will pay 320 million euros (US$423 million) for its 7 percent stake in French automaker Peugeot SA as part of an alliance designed to save the companies at least US$2 billion.
GM and Peugeot (PSA) will develop at least four vehicles together by 2016, GM said in a regulatory filing with the US Securities and Exchange Commission on Monday. The term of the pact is 10 years.
The companies said last week that they would form an alliance to pool purchasing, research and development, and to build vehicles on shared platforms to lower costs.
The alliance can end early if one of GM\'s competitors buys 10 per cent or more of Peugeot stock, either directly or indirectly, GM said in the filing.
The deal can end if the Peugeot family\'s stake falls below 15 per cent and a competitor comes to own 5 per cent or more of PSA. The alliance can also end if another automaker buys 3 per cent of PSA through a deal with PSA or the Peugeot family.
GM and Peugeot will continue to separately market and sell their vehicles.
GM is banking on the deal to help it reverse 12 years of losses in Europe, mainly on its Opel brand. Peugeot, which relies heavily on the European market, hopes to increase sales in other markets.
