Troubled French car maker Peugeot Citroen has been given a cash injection by the French government and Chinese state-owned company Dongfeng.
AFP reports that the deal gives Dongfeng and the Government each a 14 per cent share of the company. Each will pay 800 million euros for that share.
The deal means that the Peugeot family dynasty’s grip on the company comes to an end. It follows a huge net loss of €2.3 billion last year.
Peugeot Citroen employs about 90,000 people. As part of the deal, the company has committed to not close any factories in France. Also, it will €1.5 billion and retain 75 per cent of research in the country.
According to French Finance Minister Pierre Moscovici, the idea of the deal is to ensure the carmaker’s survival and open new markets, particularly China.
As Reuters reports, incoming CEO Carlos Tavares welcomed the deal and said the company has "huge room for improvement".
"Our challenge is to be the best of the Europeans in terms of (our) manufacturing and distribution model, which frankly is not the case today," he told analysts and reporters.