Hendren Group are advising clients as PSA Peugeot Citroen, the second largest of Europe’s automakers may be considering selling off a stake in its operations to its primary Chinese partner Dongfeng Motor Corp in efforts to fund expansion outside of the Continent.
Hendren Group is a financial management and investment company dealing with investment methods and strategies. Based in Tokyo boasting a large base of private clients and a well skilled team of advisors, they conduct research and then subsequently develop short and long-term systematic approaches to achieving optimum returns on investments for themselves, their associates and for their current client base.
With a profitable year to date, but facing slowing European sales both domestically and abroad Peugeot is said to be deliberating selling off a stake to its long-term partners in China, Dongfeng. The Chinese company would on face value make the most logical stakeholder in Peugeot as together the two companies jointly operate three plants in Wuhan with a further under construction. The French carmaker also has a joint venture plant with Chang an Automobile group in Shenzhen which is scheduled to commence production later this month.
“Hendren Group researchers see the Chinese company as the best fit for Peugeot as a large shareholder, they have already got a solid history in their partnership and they are achieving the goals they set out to achieve in China, which is a vital expanding market for Peugeot. While the American G.M still holds a 7% stake, no one sees this as a natural partnership at any level,” said David Holmes Senior Vice President of Mergers and Acquisitions at the Hendren Group.
The Peugeot Dongfeng alliance will provide the company with added stability for the French company, which expects to see a 5% market share within China by 2015 with local production of 750,000 cars per year. Dongfeng production for Peugeot has risen 33% for the first half of the year to 277,000 vehicles and is expected to surpass this number after the fourth plant comes online.
Both Peugeot and Dongfeng have performed well in the markets for the year to date with the French company outperforming its European rivals in share value gains. On news of the possible share sale stocks in both experienced moderate gains, bringing their ROI’s for the year to date to 83.6% and 23.4% for the French and Chinese companies respectively.
Hendren Group Senior Vice President David Holmes concluded, “The markets can often be very judgmental about such arrangements, but in his case there does not seem to be any reservations, it is seen as a natural alliance, an organic expansion given their already successful ties in China rather than an external partnership as in the case with GM. Both are doing sound business and are well placed in the Chinese auto market so we are quite confident on the outcomes to be expected so far as investment is concerned.”
Hendren Group is set to continue to advise clients to acquire shares within the Asian markets adding to successful diversified portfolios.