Peugeot agrees to state-backed chairman: sources

Tue Mar 18, 2014 2:44pm EDT
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By Laurence Frost and Gilles Guillaume

PARIS (Reuters) - PSA Peugeot Citroen's PEUP.PA board agreed on Tuesday to nominate French civil servant Louis Gallois as its next chairman, sources said, as the carmaker prepares for a 3 billion euro ($4.2 billion) tie-up with China's Dongfeng Motor Group 0489.HK.

Gallois won the board's endorsement to replace Chairman Thierry Peugeot after the founding Peugeot family agreed to support the French government's choice of candidate, the sources said. A Peugeot spokesman declined to comment.

The French government welcomed the decision. Prime Minister Jean-Marc Ayrault's office said in a statement Gallois' experience and talent would be "an asset for PSA, which will need exemplary governance over the next few years".

Paris-based Peugeot last month announced a rescue deal in which it will sell shares to Dongfeng and the French government, reducing the family's stake to match their equal holdings of about 14 percent.

The family will see its board presence halved to two full members, Thierry and cousin Robert Peugeot, the sources said. Thierry's sister Marie-Helene will leave the board while another Peugeot cousin, Jean-Philippe, remains as a non-voting member.

Former Renault RENA.PA executive Carlos Tavares is taking over as chief executive from Philippe Varin later this month, with Peugeot also getting a new chairman under the deal's terms.

Gallois, France's investment commissioner who previously headed the SNCF state railway and defense group EADS EAD.PA, prevailed over former Nexans NEXS.PA boss Gerard Hauser, the Peugeot clan's initial choice, the sources said.

As Le Figaro first reported last week, however, the family agreed to back Gallois over Hauser, a former board member at Peugeot-controlled Faurecia EPED.PA, after meetings with government officials.   Continued...

Louis Gallois, France's General Commissioner for Investment, arrives at the Elysee Palace in Paris to attend a meeting on investment strategy, January 10, 2013. REUTERS/Philippe Wojazer