PSA Peugeot Citroen eyes Mitsubishi tie up: press report
French auto maker PSA Peugeot Citroen is considering a tie-up with Mitsubishi of Japan, the financial newspaper La Tribune reported on Friday, and the price of PSA shares jumped.business Updated: Sep 04, 2009 17:49 IST
French auto maker PSA Peugeot Citroen is considering a tie-up with Mitsubishi of Japan, the financial newspaper La Tribune reported on Friday, and the price of PSA shares jumped.
The paper, citing no source, said that Peugeot head Philippe Varin was “actively considering an alliance with Mitsubishi.”
The two groups have already joined forces to develop an electric vehicle and have a partnership in Russia. The paper described a Peugeot-Mitsubishi alliance as “technically and geographically ideal.”
The price of shares in PSA Peugeot Citroen jumped by 6.57 percent to 19.87 euros here. The overall market as measured by the CAC 40 index was showing a gain of 0.53 percent.
Shares in rival French group Renault rose by 3.72 percent to 29.87 euros, and stock in French tyre maker Michelin by 3.89 percent to 51.44 euros.
At Natixis Securities, analysts said in a note to clients: “The idea (of an alliance with Mitsubishi) is not new and could make sense for several reasons, particularly since BMW has totally ruled out any idea of a capital alliance.”
Natixis said: “Peugeot sells mainly in Europe while Mitsubishi is present mainly in Japan.” Mitsubishi also had a presence in the United States.
At CM-CIC Securities, analyst Guillaume Angue said that the purpose was to make the French group more international and to “strengthen its presence on growing markets” and he thought that an alliance was probable.
Currently Europe accounts for 66 percent of PSA Peugeot Citroen sales, he said. Mitsubishi seemed to be a reasonable target for PSA in terms of size because it had sold 1.06 billion vehicles last year compared to 3.26 billion by PSA.
He said that PSA had limited financial means but that a deal could be arranged via an exchange of paper. PSA could make a private issue of up to 20.