February 28, 2012 - 20:14 AMT
PanARMENIAN.Net - General Motors is set to purchase up to seven percent of French auto giant Peugeot Citroen, sources told Dow Jones Newswires, adding that a deal could be announced as early as Wednesday, February 29.
People familiar with the matter said Tuesday that GM sees Peugeot as its "primary partner" in Europe. The sources said that France's largest carmaker had no plans to take a reciprocal stake in GM.
Peugeot shares jumped seven percent in Paris afternoon trade, Fox News reported.
Earlier Tuesday, French newspaper Les Echos said Detroit-based GM was nearing a deal to purchase slightly less than five percent of Peugeot. The two automakers were first reported last week to be mulling a strategic alliance that would include some joint production in Europe.
The potential-tie up comes as GM scrambles to turn around its struggling European operations. GM said earlier this month that it lost $747 million in the region during 2011, despite record profits for the fiscal year worldwide.
Peugeot, which is 30.3 percent family-owned, is France's largest car manufacturer, ahead of Renault, and Europe's second largest, behind Volkswagen.