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Peugeot, Renault to end production alliance in France

An employee works on an engine at "La Francaise de Mecanique" car parts supplier plant in Douvrin, northern France, October 8, 2012. REUTERS
An employee works on an engine at "La Francaise de Mecanique" car parts supplier plant in Douvrin, northern France, October 8, 2012. REUTERS

PARIS (Reuters) - Carmakers PSA Peugeot Citroen and Renault are about to end cross-shareholdings in two French plants that made up their last production alliance in the country, spokespeople for the companies said on Wednesday.

PSA will buy back the 50 percent stake Renault currently holds in its Douvrin engine plant in northern France, while Renault will buy back the 20 percent stake PSA holds in its nearby Ruitz site, which makes gearboxes.

Both carmakers would then fully own each site, respectively.

The deal was reported earlier on Wednesday by Bloomberg News. It is due to be officially unveiled next Tuesday.

Financial terms were not disclosed, and both companies said the move would not have an impact on the roughly 3,000 jobs at the Douvrin site nor on the 600 at Ruitz.

But it marks the end of a partnership dating back to 1969 and is a reminder of how France's leading carmakers have drifted away in recent decades.

Renault has since partnered with Japan's Nissan Motor Co <7201.T> while Peugeot has teamed up with General Motors and is recently mulling a tie-up with China's Dongfeng <0489.HK>, according to sources familiar with the talks.

(Reporting by Gilles Guillaume, writing by Natalie Huet, editing by G Crosse)

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