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Peugeot May Sell 7% Stake to GM in Alliance

PSA Peugeot Citroen (UG) may announce as soon as this week plans to sell a stake of about 7 percent in the French carmaker to General Motors Co. (GM) as part of a development alliance, people familiar with the matter said.

The deal would involve a standstill agreement by which GM would not take a greater holding in the Paris-based carmaker without permission, said the people, who asked not to be identified because the talks are private. Peugeot may offer additional shares through a rights issue as part of the transaction, the people said.

A GM-Peugeot alliance may include developing engines and building vehicles together in the region, a person familiar said last week. GM, the world’s largest carmaker, is looking for ways to turn around its unprofitable Opel brand, while Peugeot is seeking to stem a growing debt load. Peugeot and Bayerische Motoren Werke AG (BMW) began cooperating on engines for the German carmaker’s Mini brand in 2002, expanding the partnership with a 100 million-euro hybrid joint venture last year….”

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