PARIS, July 22 French carmaker PSA Peugeot
Citroen is in preliminary talks to sell part of its
financing arm to Banco Santander or merge it with the
Spanish bank's assets, the Wall Street Journal reported on
A deal would see Santander assume most of Banque PSA
Finance's refinancing needs and would end the unit's reliance on
7 billion euros ($9.2 billion) in state guarantees, the
European Union antitrust regulators are investigating
whether the guarantees comply with state aid rules and ensure
its long-term viability.
Santander could own half of Banque PSA under one
possibility, the newspaper said, adding that deals with other
banks aimed at reinforcing Banque PSA's access to refinancing in
some countries were also being discussed.
The carmaker was forced last year to negotiate a
government-backed rescue for the Banque PSA financing arm after
a series of credit downgrades hit borrowing costs.
Peugeot is one of the carmakers worst hit by the collapse of
auto sales in austerity-hit southern European markets and has
reacted to the crisis by cutting 10,0000 jobs and selling 2
billion euros in assets.
Peugeot was not immediately reachable for comment. Santander
declined to comment.
($1 = 0.7611 euros)
(Reporting by Alexandre Boksenbaum-Granier and James Regan;
Editing by Mark Potter)