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Peugeot sign a rescue deal with China Dongfeng Motor.
Image copyright Getty Images caption Picture 25 4 involvement of the Peugeot family will be diluted to 14.
Struggling French carmaker PSA Peugeot Citroen has sealed a long-awaited bailout deal which will see its control CEDE the founding family of the company.
China's Dongfeng Motors and the French government will each invest about 800 euros 660m in exchange for 14 issues.
Another 1 EUR 4 billion will be raised from existing investors Peugeot.
The agreement is still subject to a shareholder vote but will provide to keep the money if necessary Peugeot afloat after government guarantees expire.
If the agreement is approved, family participation Peugeot April 25 will be diluted to 14, corresponding to that of the French government and the Chinese automaker.
the second largest automaker also announced its latest financial results of Europe Wednesday, warning that it could face losses until 2016.
Peugeot said its net loss decreased to 2 euros 32bn last year, compared with a loss of 5 billion euros in 2012.
Peugeot offering Dongfeng brand erosion of power in one of the oldest and proudest industrial dynasties in France.
The Peugeot clan had controlled the company since the early days of the automobile industry in the 19th century.
The loss of control leaves two families of European cars driving - the Quandt at BMW and Fiat Agnelli, although this latter effect is weakening after the merger of Chrysler with Fiat.
There is no doubt that Peugeot needed rescue, after one of the worst victims of the crisis in the European markets.
But the family members were divided on the way forward for the biggest car manufacturer in France.
According to French media reports letters leak, chairman Thierry Peugeot wanted to put more money in the family business and to increase its influence.
Wednesday's agreement certainly had a good reception from investors, with shares of Peugeot surging.
A company that has the money bleeding received a capital injection and a business plan for the future.
But the structure leaves a lot Peugeot with three equal partners - Dongfeng, the French state and the family, it will only work if all drive in the same direction.
Sales also fell 2 4 a year earlier to 54 euros 1 billion, due to the demand for new cars in Europe warm.
There were months of talks on the fate of the French carmaker, and reports say the deal is likely to be formally signed in March.
In a statement to the Hong Kong Stock Exchange, Dongfeng said the agreement aims to broaden and deepen their existing cooperation with Peugeot.
He also said the project would enhance cooperation overseas to achieve the goal to sell 1 5 million vehicles under the Dongfeng Peugeot SA and Citroen brands per year from 2020.
Peugeot already has a joint venture with Dongfeng, which is one of China's new car brands and is known for its heavy trucks and vehicles Fengshen line.
However, the new provision should lead to increased production and a new center for research and development.
Dongfeng Peugeot should also promote the brand on automobile markets rapidly in Southeast Asia.
The case also made Dongfeng the latest Chinese automaker to purchase a Western competitor.
Last year, Zhejiang Geely Holding bought London black cab manufacturer Manganese Bronze Holdings to 11 4m after the company went into administration Geely also bought Swedish brand Volvo in 2010.
Image copyright AFP Image Caption Peugeot CEO Philippe Varin is ready to be replaced by Carlos Tavares.
Peugeot was founded 200 years ago and is one of the oldest industrial dynasty in France.
The company started in 1810 as a manufacturer of tools and coffee grinders, which are still sold under his name.
However, he faced financial difficulties and declining market share in recent years.
Peugeot has signed an investment agreement with General Motors in 2012, but the US automaker offloaded its stake in the loss-making company in December.
Last year, he also faced criticism for closing its plant in Aulnay-sous-Bois, near Paris to try to reduce costs.
The French government said earlier this week that further plant closures are not on the agenda once it has become a significant shareholder.
The French Industry Minister Arnaud Montebourg had also said the agreement would pave the rebirth of Peugeot and international development of a company that had become isolated.
Peugeot signs a bailout agreement with Dongfeng Motor China BBC News, Peugeot signs rescue deal.