BEIJING -- Dongfeng Motor Group is reviewing a deal with PSA to cut its stake in the French automaker after a fall in share prices sparked by the coronavirus pandemic.
PSA agreed to merge with Fiat Chrysler Automobiles in December to create the world's fourth-biggest automaker by sales volume.
Dongfeng had agreed to lower its 12.2 percent stake in PSA by selling 30.7 million shares to the French company to help smooth the merger. The stake being was worth around 680 million euros ($744 million) and the sale will leave Dongfeng holding around 4.5 percent of the merged PSA-FCA group.
But, during an earnings call with investors, a Dongfeng official said that the Chinese company was reviewing the matter.
"There are possibilities that the stake sale plan will change. We are evaluating the issue," the official said during the call on Tuesday, a recording reviewed by Reuters showed.
"This is closely related to their [PSA's] merger talks with FCA, so we are also in close talks with them," the official said, without elaborating on how its stake will change.
Dongfeng did not immediately respond to a request for comment from Reuters on Thursday, while PSA and Fiat Chrysler both declined to comment.
A document seen by Reuters showed Dongfeng and PSA plans to cut jobs at Wuhan-based DPCA and reduce its number of assembly plants to try to make the joint venture more profitable.
The coronavirus pandemic has roiled stock and debt markets, stalling transactions including VW truck unit Traton's Navistar buyout and BorgWarner's efforts to clinch a deal with Delphi.
PSA and FCA said in December they expected their deal, which needs U.S. regulatory approval, to close in 12 months to 15 months.