PSA Says It’s Open to Deals After Report of Jaguar Talks
(Bloomberg) -- PSA Group, the maker of Peugeot cars, remains open to “any opportunities” that create long-term value, following a report the French manufacturer is close to buying Jaguar Land Rover Automotive Plc.
PSA and JLR owner Tata Motors Ltd. are exploring details of cost savings after a tie-up with a “post-sale integration” document outlining specific areas, Press Association reported. Negotiations are moving quickly, according to an unidentified person at JLR, PA said.
“We have no knowledge of such a document,” PSA said in an emailed statement.
“As a matter of policy, we do not comment on media speculation,” Tata said in an email. “But we can confirm there is no truth to these rumors.”
PSA Chief Executive Officer Carlos Tavares has started sounding out companies for potential deals to help save costs and boost its scale, and has discussed a potential partnership with Fiat Chrysler Automobiles NV in Europe, Bloomberg News reported in March, citing people familiar with the situation. PSA wants to be “open and try to look for the best opportunities for our company,” Tavares said at the Geneva car show earlier that month.
PSA fell 2.8 percent to 21.18 euros at 4:40 p.m. in Paris, while Fiat declined 4.1 percent in Milan.
Manufacturers are under pressure to combine efforts in the costly shift to electric and self-driving cars, as well as app-based services. Ford Motor Co. and Volkswagen AG are working toward a broad partnership that would include commercial vehicles and autonomous driving, while BMW AG and Daimler AG are collaborating on a range of shared- and self-driving efforts.
PSA, which also makes Citroen, DS, Opel and Vauxhall cars, is seeking to expand its footprint outside of Europe. After buying Opel and Vauxhall from General Motors Co. in 2017, more than 80 percent of PSA’s sales come from the continent, where demand declined last year and tightening emissions regulations are crimping returns.
India’s Tata is exploring strategic options for its struggling British luxury auto brand, including a potential stake sale, Bloomberg News reported in March. Jaguar Land Rover has been hit hard by slumping sales in China, the shift away from combustion and diesel engines, and strong historic links to the U.K., where concern over a disruptive Brexit has weighed on demand and prompted some brands to move production.
Jaguar Land Rover bonds jumped by the most in three months. The company’s 650 million euros ($731 million) of notes due in January 2024 rose three cents on the euro to 85 cents while its 500 million euros of 2026 securities rose two cents to 88, according to data compiled by Bloomberg.
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