Yesterday the Peugeot action also fell 2

After months of speculation limply wrong, PSA and Mitsubishi Motors themselves are decided to formalize their discussions, to form a trans-continental alliance, to weigh more heavily on the world stage. Without going into details, the number two European indicated yesterday look with the 7th Japanese Builder "enlargement" of their existing relations, for a "strategic partnership". The idea would be that PSA take a participation in the Tokyo group, majority according to some sources, in a reserved capital increase from 1.5 billion to EUR 2.2 billion. In the opposite direction, Mitsubishi would take a ticket in PSA. In the view of some analysts, the discussions initiated since months already, might still last.

The first contacts with Mitsubishi Motors date back to 2005, when Jean-Martin Foltz purchased "off-the-shelf" Japanese one model of large 4 x 4 (Outlander), became in French Peugeot 4007 and Citroën C-Crosser. Relations developed then, when SAP decided to invite the constructor of the Lancer Sedan in its plant in Russia (Kaluga) project, which will open in 2012, then buy him his new car electric i-Miev, to offer low-cost vehicle in Europe, under the Peugeot and Citroën, coats of arms from the end of 2010.

The effect of size argument

Their reports could remain at these three technical cooperation. But the crisis has rolled the results of the two companies and the Peugeot, shareholder of reference of the Group family, has evolved. Since more than a year, it is more opposed to a grand alliance, to help the Builder to become more global (Europe weighs always 66 of its sales). But on a condition: that it will retain control of the bicentennial group. Condition which seems to exclude other more ambitious alliances, for example with Honda, Group family ownership as PSA with which synergies would be more proud look. Christian Streiff had worked on the Mitsubishi folder. His successor arrived in June, Philippe Varin, turn the top speed.

As in the case of Fiat-Chrysler, the effect of size an argument valid in the global automotive battle. The French group producing a little more than 3 million vehicles is not insensitive to the idea to add to its volumes the 760,000 Mitsubishi vehicles, which would allow to move from the world 7erang 9eau. Upon arrival, Philippe Varin was eager to find an ally to become less "européano-centric". But his idea was not to blur the message internally, do not shout to his troops that the solution to the problems would come of an outside Savior. Now that it has launched, on 12 November, a plan of action to inflate the operational result of EUR 3.3 billion, can mobilize more on the research of external synergies.

View of the side Mitsubishi, this alliance has left or double speeds. "The President of Mitsubishi Corp. has been suggested that he didn't want to make direct investment in Mitsubishi Motors," said Penn Bowers, analyst at CLSA Tokyo. After the marriage failed with Daimler (its shareholder to 37 between 2000 and 2004) and the dissolution of the much older links with Chrysler, the group needs a strong ally to overcome the crisis.

High value

As a whole, analysts are likely to cheer the prospect of this new global reconciliation. Without the risks attached to a merger, "this reconciliation could add EUR 560 million to profit before tax of Peugeot," including calculates Adam Jonas, in Morgan Stanley. However, several aspects should encourage them to reserve. Yesterday, the Peugeot action also fell 2.7. In terms of sales, Mitsubishi is little present in China, India or Brazil, three markets exploding. In the United States, there was completely marginalize this year despite its local factory, to see its market share drop to 0.5, $ 345,000 sales in 2002 to six times less. Intake seems limited to SAP (well established in China and Mercosur), at least today.

Another problem, enhancement of Mitsubishi, which remains high, unlike that of PSA. Its market capitalization of 5,73 billion more net debt gives a value of 7.3 billion business, which is 0.64 times the sales expected this year against a ratio of 0.2 times the turnover in the case of SAP, according to Guillaume Angué de CN - CIC Securities. Funding, the French will have to be imaginative.