French automaker PSA Peugeot Citroen said on Thursday that it had started exclusive negotiations to offload a 75% stake in its logistics arm GEFCO to Russian railway operator JSC Russian Railways, under a strategic partnership at GEFCO.
Russian Railways will pay EUR800m (USD1.04bn) for the stake, which will be sold after the unit pays to PSA Peugeot Citroen a special dividend of EUR100m.
As a result of the transaction, GEFCO will be able to achieve greater business diversification and raise its turnover, PSA Peugeot Citroen noted. The move will spur GEFCO’s growth in eastern and central Europe, especially in Russia, and will back its expansion plan for China, India and Latin America, the seller said. The unit’s revenue came in at EUR1.88bn in the first half of this year.
PSA Peugeot Citroen said that it and the logistics subsidiary would begin information and consultation procedures with their works councils on the deal, which will also need antitrust green light.
GEFCO’s headquarters in France as well as its management team will be retained. Luc Nadal will remain at the helm of the company as president.
PSA Peugeot Citroen plunged into a EUR819m net loss, or EUR2.73 per share, between January and June 2012 from a net profit of EUR806m, or EUR3.55 apiece, in the same period of last year. Its revenues slipped 5.1% to EUR29.55bn.