French carmaker Peugeot has confirmed its alliance with General Motors, in a move that could see the founding Peugeot family reduce its control of the family business.
After weeks of speculation, Peugeot said in a statement that it has teamed up with GM to “contribute to the profitability of both partners” and consolidate its presence in the European market.
As part of the deal, GM will take a 7% stake in the Paris-based automobile-maker, making it the second largest shareholder in the company after the Peugeot family.
According to reports by the financial media, this could be a sign that the Peugeot family, which owns 30.9% of the carmaker and holds 48% of the voting rights, is reducing its controlling stake.
Analysts reckon the family’s voting power could fall to below 40%, but the group did not disclose any change to the family’s control.
“With the strong support of our historical shareholder and the arrival of a new and prestigious shareholder, the whole group is mobilised to reap the full benefit of this agreement,” said Philippe Varin, the non-family chairman of the managing board of Peugeot.
Under the GM-Peugeot agreement, the two companies will share vehicle infrastructure, components and modules, and will pool their purchases of materials and parts, worth a combined $125 billion (€93.8 billion) a year, said the statement.
Peugeot, headed by family member Thierry Peugeot, will also raise €1 billion through a share rights issues, which will include “an investment from the Peugeot family group, as a sign of their confidence in the success of the alliance”.
Like Peugeot, founded by Armand Peugeot in the early 19th century, Italy’s Fiat is also looking for a tie-up with an automobile company. According to its chief executive, Sergio Marchionne, family-controlled Fiat is looking for a partner either in Europe or in Asia.