GM to unload 7% stake in French automaker PSA Peugeot
Scope of joint vehicle projects reduced
General Motors said today that it is selling its entire stake in PSA Peugeot Citroen while scaling back efforts to jointly develop vehicles with the French automaker.
GM said it will sell its 7 percent stake, or 24.8 million shares, through a private placement to institutional investors. GM acquired the shares in February 2012 for about $400 million as part of a budding alliance with the French company.
“Our equity stake was planned to support PSA in their efforts to raise capital at the time of the creation of the GM and PSA alliance, and that support is no longer needed,” GM Vice Chairman Steve Girsky said in a statement.
“The alliance remains strong with our focus on joint vehicle programs, cross manufacturing, purchasing, and logistics,” Girsky said. “We’re making good progress while remaining open to new opportunities.”
GM said today it has further scaled back the scope of the alliance, abandoning plans to co-develop a common platform for subcompact cars and a small, three-cylinder engine.
GM now expects the alliance, which includes a joint purchasing arrangement, to wring $1.2 billion in costs annually by 2018, down from an original projection of $2 billion. The savings will be split roughly evenly between the two companies, the companies said.
GM and PSA will continue to co-develop two previously announced vehicles, both based on PSA platforms: a small multi-purpose vehicle and a mid-sized crossover. They also will work on a new generation of small commercial vehicles, based on a new PSA platform.
Separately, GM also said today it is selling its 8.5 percent stake in Ally Financial Inc., the one-time GMAC finance unit, for about $900 million.
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