GM holds 7% of Peugeot after share issue

US auto giant General Motors has acquired a 7.0 percent stake in PSA Peugeot Citroen after the French company raised one billion euros ($1.32 billion) via a share issue, a statement said Tuesday. The deal, agreed as part of a wider technical tie-up, means GM is the second largest shareholder in Peugeot after the Peugeot family, which has some 25 percent of the stock and nearly 38 percent of the voting rights. Peugeot, Europe's number two carmaker after Germany's Volkswagen, said the fund raising exercise had been a success, with demand totalling 1.78 billion euros. The two companies announced the alliance at end-February, stressing that it was not a merger and both remained independent entities. Under the agreement, a joint global committee aims to generate some $2 billion in savings annually within about five years. To do that, GM, which controls money-losing European brands Opel and Vauxhall, and Peugeot will share certain vehicle platforms, components and modules. However, each will continue to "market and sell its vehicles independently and on a competitive basis," they said in a joint statement at the time. GM and Peugeot will first work together on small and midsize passenger cars, family vans and crossover sport utility vehicles and may then consider developing a new common platform for low-emission vehicles. The accord also creates a global purchasing joint venture to buy $125 billion in commodities and other goods and services from suppliers a year.