DETROIT (Reuters) - General Motors Co (GM.N) said Thursday it will sell its entire 7 percent stake in French alliance partner PSA Peugeot Citroen (PEUP.PA) because the investment is no longer necessary.
GM will sell the 24,839,429 shares through a private placement to institutional investors. The company had acquired the stake in Peugeot when it entered into an alliance with the French company in March 2012.
“Our equity stake was planned to support PSA in their efforts to raise capital at the time of the creation of the GM and PSA alliance, and that support is no longer needed,” GM Vice Chairman Steve Girsky said in a statement.
Girsky said the alliance would remain in place, with a focus on joint vehicle programs, cross manufacturing, purchasing and logistics.
“We’re making good progress while remaining open to new opportunities,” he said.
Peugeot said earlier on Thursday it took a 1.1 billion euro ($1.52 billion) writedown at its ailing overseas operations and won GM backing for a tie-up with China’s Dongfeng Motor Group (0489.HK). Peugeot and GM also lowered savings goals for their scaled-down alliance.
Shares of GM were up 0.3 percent at $40.28 in midday trading on the New York Stock Exchange.
Reporting by Ben Klayman; Editing by Bernadette Baum