Dongfeng Motor has confirmed that it is making a massive investment in the struggling Peugeot car manufacturer.
In a statement released to the Hong Kong stock exchange, Dongfeng confirmed that it will be buying a 14 per cent stake in Europe's second-largest auto company in a deal worth about 800 million euros (£660 million).
The French government will invest the same amount of money, which will cut the Peugeot family's 25.4 per cent stake to just 14 per cent.
Dongfeng explained in the statement that the investment is intended to "expand and deepen their current cooperation" with Peugeot.
It was added the venture would "strengthen overseas cooperation to achieve the objective of selling 1.5 million vehicles under the Dongfeng, Peugeot SA and Citroën brands per year starting from 2020".
Dongfeng also stated that the deal will have the impact of "enhancing strategic collaboration in research and development of both parties".
The share price of Dongfeng fell by more than one per cent on the Hong Kong stock exchange earlier today (February 19th).
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