French Minister Criticizes Peugeot Family Bickering -Report

French Industry Minister Arnaud Montebourg hit out at bickering among the Peugeot family over plans for a capital increase for PSA Peugeot Citroen that will likely see the French state and Chinese auto maker Dongfeng Motor Co. become significant shareholders, according to an interview published in Monday's edition of Les Echos.

"These indecent quarrels among the Peugeot family cannot go on in view of the need to get PSA back on its feet," Mr. Montebourg is quoted as saying.

He said that because of its family-controlled status Peugeot "has become isolated, has found itself without an ally in the world. It is too small, and is in danger." An alliance with Dongfeng can create a world giant automobile group and bring about Peugeot's industrial revival, he said, thus allowing its decision-making bodies and its research, development and industrial activties to remain in France.

The Peugeot family has been split over the most likely scenario that will see the French state and Dongfeng acquiring equal stakes of around 14% in Peugeot as part of a 3 billion euro capital increase. Some members of the Peugeot family, which will remain a core shareholder, would prefer to avoid complicated governance issues that might arise and raise the capital wholly from existing shareholders and from the market.

Newspaper Web site: http://www.lesechos.fr

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