Talks between PSA Peugeot Citroen and Mitsubishi Motors on a possible joint venture could fail because the two cannot agree on the value of their groups, the French newspaper Les Echos reported.
The two companies announced talks over a possible strategic partnership last month and Japanese press reports have suggested that Mitsubishi might issue shares worth JPY200-300bn (US$2.1-3.2bn) for PSA to buy which would give it between 30-50% of Mitsubishi and effective control; it would also create the sixth-biggest car group globally.
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But now Les Echos said PSA president Philippe Varin is preparing investors for failure. Reports suggest that the problem is that Mitsubishi carries a higher stock market valuation than PSA. The Peugeot family owns 30.3% of PSA and does not want to overpay for its share in Mitsubishi, nor lose control of the French group in an unfavourable exchange of shareholdings. said Les Echos without citing sources.
A PSA spokesman declined to comment on the reports but confirmed that talks with Mitsubishi continued. A Mitsubishi spokesman said talks on existing co-operation continued, including electric cars and a joint factory in Russia.
