By Kim Richters
Peugeot SA has agreed to sell up to around 7% of its stake in automotive supplier Faurecia SA ahead of Peugeot's expected merger with Fiat Chrysler Automobiles NV, the two car makers said on Wednesday.
The boards of Peugeot and Fiat Chrysler agreed that Peugeot could take further measures to ensure that their planned holding company, Stellantis, wouldn't take control of Faurecia, but that this wouldn't include further share sales before the merger closes. France's Peugeot currently owns 46% of Faurecia.
Peugeot and its Italian-American peer expect the agreement to help them secure regulatory approvals for the merger, they said.
Proceeds from the sale of shares will be distributed to Stellantis shareholders along with proceeds from the planned spin-off of the rest of the stake in Faurecia after the deal's completion.
Fiat and Peugeot said their merger was making progress, with the two companies signing cross-border merger terms on Oct. 27. They expect it to close by the end of the first quarter next year.
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(END) Dow Jones Newswires