Peugeot Family Okays PSA Equity Deal

The two boards representing the Peugeot family have approved PSA Peugeot Citroen's plan to sell €3 billion in equity to the French government, China's Dongfeng Motor Group and existing company shareholders, says Reuters, which cites unidentified sources.

The deal would resulting in equal 14% stakes held by the family, Dongfeng and the French government. The Peugeot family currently owns 25% of the struggling company.

Reuters notes that PSA has been propped up by €7 billion in government guarantees to its financial unit that will expire next year.

Some analysts doubt the logic of the deal, which PS. They suggest PSA might emerge stronger by selling off its finance arm or Faurecia components affiliate.