PSA, Dongfeng Finalize Equity Deal

On Wednesday PSA Peugeot Citroen and Dongfeng Motor Group finalized the framework agreement to sell Dongfeng and the French government equal 14% stakes in the French carmaker.

The deal will create a €3 billion capital increase for PSA. It also will expand the company's existing partnership with Dongfeng to co-develop vehicles and hike production of Peugeot and Citroen vehicles in China.

PSA is counting on strong growth in China through the Dongfeng partnership and a second joint venture with China Changan Automobile Group to help return it to profitability. The company lost €2.3 billion in 2013.

PSA currently generates about 58% of its sales in Europe. Last year the group's sales fell 9% in Europe, 19% in Russia and 16% in Brazil.