GM stake in Peugeot sold in a day, GM loses millions
Mon, 23 Dec 2013
The fling between General Motors and PSA/Peugeot-Citroën isn't kaput, but the flirting couple has separated its finances. Just a day after announcing its intention to divest itself of its seven-percent stake in the French automaker, GM had done so, getting 250 million euros ($342M US) for it. That would represent a loss of between $48 million and $71 million for the 21-month partnership.
It was a rocky romance, with the yin of a jointly developed compact platform and further integration overcome by the yang of a share writedown and Peugeot's need for a bailout from the French government. Even though they keep separate bank accounts now, the two companies will continue working together on cost savings through joint purchasing and products like a subcompact MPV and a compact crossover.
The original tie-up envisioned a ten-year term, so there's still time to make something of it. You can read the brief press release on the matter from GM below.
GM Completes Sale of PSA Equity Stake
DETROIT, 2013-12-13 – General Motors Co. today announced it has completed the sale of its entire 7 percent stake in PSA Peugeot Citroen through a private placement to institutional investors. The private placement of 24,839,429 shares generated gross proceeds of €0.25 billion.
This announcement is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities and the offer of PSA shares does not constitute a public offering in any jurisdiction, including France.
The offer and sale of the PSA shares referred to in this announcement has not been, nor will be, registered under the United States Securities Act of 1933 (the "Securities Act") and the PSA shares may not be offered or sold in the United States absent such registration or an applicable exemption from the registration requirements of the Securities Act. There will be no public offering of the securities in the United States in connection with this transaction.
Any investment decision to buy shares in PSA must be made solely on the basis of publicly available information regarding PSA. Such information is not the responsibility of GM and has not been independently verified by GM.
Release, publication or distribution of this press release is forbidden in any country where it would violate applicable laws or regulations.
About General Motors Co.
General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com.
By Jonathon Ramsey