Peugeot to buy big stake in Mitsubishi Motors Corp

Peugeot to buy stake in Mitsubishi

Associated Press, 12.02.09, 08:41 PM EST

TOKYO -- French carmaker PSA Peugeot Citroen is in talks with Mitsubishi Motors Corp. to buy a 30 to 50 percent stake in Japan's No. 4 automaker, a paper said Thursday.

The Nikkei business daily said Peugeot ( PEUGY.PK - news - people ) Citroen will spend up to 300 billion yen ($3.4 billion) to acquire the stake in Mitsubishi. The paper gave no sources.

Mitsubishi declined to confirm the report.

"There are no facts to be announced," the Japanese company said in a statement.

The paper said Peugeot Citroen - Europe's second biggest car company - and Mitsubishi are in the final stages of capital tie-up talks. The deal could effectively put Mitsubishi under Peugeot Citroen's control.

The French carmaker may seek more than a 50 percent stake in Mitsubishi, the paper said.

The two companies already have collaborated, agreeing to launch an electric car in Europe by the end of 2010. It will be based on Mitsubishi's i-MiEV, which was launched on the Japanese market in June.

The two have also agreed to set up an auto factory in Russia to make mid-sized sport utility vehicles.