PSA Confirms Likely $1.2 Billion Sale of Gefco Stake

PSA Peugeot Citroen says it is holding exclusive negotiations with state-owned JSC Russian Railways (RZD) about a €900 million ($1.2 billion) deal to sell 75% of the carmaker's Gefco logistics unit, as has been widely reported in the news media.

Gefco would pay a €100 million ($130 million) special dividend to PSA before the RZD buys the controlling stake for €800 million ($1 billion), according to the companies. RZD said earlier this week it has invited state-run French railroad SNCF to become a partner in Gefco, which is based in a Paris suburb.

RZD would manage the logistics unit, including services provided to PSA. The French carmaker and alliance partner General Motors Co. agreed in July that Gefco would begin handling most of GM's European logistics next year.

PSA and RZD say they will discuss the proposal with their unions. The deal is subject to approval by anti-trust authorities.