Shares in PSA Peugeot Citroen rose sharply on Tuesday on reports that General Motors is in advanced talks on buying a small stake in the French carmaker – perhaps around five percent.
Sources told various media outlets it would be “purely symbolic” stake which was intended to cement their proposed strategic alliance in Europe and elsewhere.
GM and Peugeot would not comment on the reports.
A deal could be announced in the next few days, although sources warned that an agreement has not been reached and talks could still fall apart.
GM and Peugeot are discussing a broad strategic alliance designed to stem losses in Europe and cut production costs elsewhere, according to people familiar with the matter.
For GM, an alliance would provide a means to lower operating costs at its loss-making European unit, Opel, while Peugeot would gain much-needed access to international markets at a time when auto sales in Europe are sagging, sources said.
Peugeot, which is heavily reliant on the French and European markets, has been under pressure to find a partner to broaden its presence around the world and gain access to growth markets like Latin America, China and Russia.