Manufacturers 'to sign capital deal'

A report which shows French car maker PSA Peugeot Citroen intends to acquire a 30-50% stake in Mitsubishi Motors has boosted the Japanese car manufacturer's shares by almost 18%.

According to the Nikkei business daily, Peugeot Citroen will spend up to 300 billion yen (£2.05 billion) to buy the stake in Mitsubishi. Both firms are in the final stages of capital tie-up talks.

This lifted shares in Japan's fourth largest manufacturer by 17.6% to 140 yen (£0.95).

However, Mitsubishi declined to confirm the advancement saying: "There are no facts to be announced."

If the agreement is signed, it would put Mitsubishi under the control of Europe's second biggest car company - creating the world's sixth-largest automobile alliance.

The report added that Peugeot may seek more than a 50% stake in Mitsubishi, hoping to tap into Mitsubishi's expertise in electric vehicles and other environmental technology.

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