PARIS, Feb 17 (Reuters) - PSA Peugeot Citroen’s founding family gave the go-ahead on Monday for a 3 billion euro ($4.1 billion) tie-up with China’s Dongfeng that would draw a line under one of France’s oldest industrial dynasties, sources said.
The boards of Peugeot family holding Etablissements Peugeot Freres and its FFP subsidiary signed off on the capital increase plan to be announced by the French carmaker on Feb. 19, two people with knowledge of the meetings said.
Directors of the two holding companies approved “all of the proposals” negotiated with the Chinese carmaker, one source said.
Peugeot and Dongfeng Motor Group have been in talks for months over a rescue deal that would see the Chinese automaker and French government take matching 14 percent stakes. The plan is due to be approved by Peugeot’s own board on Tuesday and announced the following day, sources have said.
A separate agreement to create a European sales financing alliance with Banco Santander is due to be unveiled simultaneously, according to people with knowledge of the plans. (Reporting by Laurence Frost and Gilles Gillaume)