Report: Peugeot to buy stake in Mitsubishi

AP News
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Posted: Dec 03, 2009 1:32 AM

Shares in Mitsubishi Motors Corp. jumped 18 percent Thursday following a report that French carmaker PSA Peugeot Citroen will buy a 30 to 50 percent stake in Japan's No. 4 automaker.

The Nikkei business daily said Peugeot Citroen will spend up to 300 billion yen ($3.4 billion) to acquire the stake in Mitsubishi. Investors took heart from the report, lifting shares in Mitsubishi by 17.6 percent to 140 yen in the morning session.

Mitsubishi declined to confirm the report, which gave no sources. But the Japanese company issued a statement saying: "There are no facts to be announced."

The paper said Peugeot Citroen _ Europe's second biggest car company _ and Mitsubishi are in the final stages of capital tie-up talks. The deal could effectively put Mitsubishi under Peugeot Citroen's control, creating the world's sixth-largest automobile alliance.

The French carmaker may seek more than a 50 percent stake in Mitsubishi, hoping to tap into Mitsubishi's expertise in electric vehicles and other environmental technology, the paper said.

A spokeswoman in Tokyo for Peugeot Citroen Japan declined to comment on the report.

The two companies already have collaborated, agreeing to launch an electric car in Europe by the end of 2010. It will be based on Mitsubishi's i-MiEV, which was launched on the Japanese market in June.

Mitsubishi will make 2,000 units of the i-MiEV in the current fiscal year to March 2010. The company said Thursday it aims to boost i-MiEV production to 15,000 units by March 2012.

Mitsubishi and Peugeot Citroen have also agreed to set up an auto factory in Russia to make mid-sized sport utility vehicles. Production at the Russian joint venture will begin in early 2012.

Mitsubishi had formed a capital tie-up with DaimlerChrysler AG, which held a 37.3 percent stake in the Japanese automaker. But DaimlerChrysler sold the entire stake in Mitsubishi in 2005, ending the tie-up.