(Adds French PM's office welcoming decision)
By Laurence Frost and Gilles Guillaume
PARIS, March 18 PSA Peugeot Citroen's
board agreed on Tuesday to nominate French civil servant Louis
Gallois as its next chairman, sources said, as the carmaker
prepares for a 3 billion euro ($4.2 billion) tie-up with China's
Dongfeng Motor Group.
Gallois won the board's endorsement to replace Chairman
Thierry Peugeot after the founding Peugeot family agreed to
support the French government's choice of candidate, the sources
said. A Peugeot spokesman declined to comment.
The French government welcomed the decision. Prime Minister
Jean-Marc Ayrault's office said in a statement Gallois'
experience and talent would be "an asset for PSA, which will
need exemplary governance over the next few years".
Paris-based Peugeot last month announced a rescue deal in
which it will sell shares to Dongfeng and the French government,
reducing the family's stake to match their equal holdings of
about 14 percent.
The family will see its board presence halved to two full
members, Thierry and cousin Robert Peugeot, the sources said.
Thierry's sister Marie-Helene will leave the board while another
Peugeot cousin, Jean-Philippe, remains as a non-voting member.
Former Renault executive Carlos Tavares is taking
over as chief executive from Philippe Varin later this month,
with Peugeot also getting a new chairman under the deal's terms.
Gallois, France's investment commissioner who previously
headed the SNCF state railway and defence group EADS,
prevailed over former Nexans boss Gerard Hauser, the
Peugeot clan's initial choice, the sources said.
As Le Figaro first reported last week, however, the family
agreed to back Gallois over Hauser, a former board member at
Peugeot-controlled Faurecia, after meetings with
Gallois has served on the Peugeot board since late 2012,
when his appointment as a nominal independent was imposed on the
company by President Francois Hollande's Socialist government in
return for 7 billion euros in state loan guarantees.
His nomination will be submitted for formal approval by the
new board on April 29 and by the Peugeot shareholder meeting,
which may be brought forward to April 25 from April 30, the
The agreement underpinning Peugeot's capital increase and
tie-up with Dongfeng is due to be finalised during a visit to
Paris by Chinese President Xi Jinping next week.
(Additional reporting by Julien Ponthus; Editing by Greg
Mahlich and David Holmes)