NEW YORK (The Deal) -- France's Peugeot family has let go of the wheel, relinquishing control of PSA Peugeot Citroen, 204 years after their forebears founded the coffee mill and bicycle maker that would become Europe's second-largest carmaker.
Peugeot said Wednesday, Feb. 19, it will launch a widely anticipated 3 billion ($4.12 billion) capital increase, reducing the founding family's stake to 14%, equal with new partners Dongfeng Motor Group, of China, and the French state.
Under the terms of the share sale Dongfeng and France will each pay 525 million for a reserved parcel of shares before participating in a 1.95 billion capital increase available to all existing shareholders. Shares will be sold at 7.50 each, a 40% discount to their Tuesday closing price.
"We are giving a new impetus to our group, with an ambitious industrial and commercial plan, and solid financial resources," Peugeot Chairman Philippe Varin said in a statement.
Dongfeng and the French state will each invest a total of 1.1 billion for their stakes and will be handed a third of the positions on a new supervisory board, leaving the Peugeot family's holding companies to appoint the final third of the seats.
In addition to the capital increase, Peugeot said it will take in as much 1.5 billion by 2018 from a new motor vehicle financing joint venture agreed with Banco Santander. The new venture will be launched in mid-2015 to provide loans across 11 European companies through Peugeot's Banque PSA Finance, which will be separated from the carmaker.