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Peugeot-Citroen Negotiating for Auto Supply Company

25 October 2000

    Paris - A major acquisition is looming in France today as the
Peugeot-Citroen group announced this morning that they are close to
finalizing a deal to acquire the automotive business of French giant
Sommer-Allibert.  The move is in keeping with what has been 
reported here over the last few days as poor profit performance in the
automotive sector with a bleak short-term future seems to be leading to the
placement of "for sale" signs on several large automotive businesses.  

     The deal that is being negotiated at this time is quite complicated
and involves the French company Faurecia, in which Peugeot already owns a
majority interest.  Faurecia, a Tier 1 supplier, will acquire a holding
company trading as SIT, which in turn owns 
about 38% of Sommer-Allibert stock and 52.9% of its voting rights.
Faurecia and SIT will then make a joint takeover bid for the balance of
Sommer-Allibert with an offer of 57.5 euros per share.  The total deal is
said to be worth about euro 1.48 billion.  

     Faurecia has been undergoing a restructuring program with plans to
close old plants and build four new plants in Poland, Slovakia, Portugal
and Tunisia.       The Sommer-Allibert automotive unit is reported to be
the third largest seat maker in the world behind Lear and JCI, and gains in
size as part of Faurecia.  Additionally, the company produces a host of
other interior and under-the-hood components, 
including dash panels, acoustic modules, carpets and door panels.  

     Rumors that the Sommer-Allibert auto business was for sale surfaced
last summer.  Although consistently denied by the company's management,
officials at Valeo and Faurecia admitted they were looking at the business,
as were teams from Magna, Lear and Delphi.  Valeo probably didn't have
enough money to be a serious bidder and it was doubtful that the French
would allow the business to leave French ownership to a Canadian (Magna) or
U.S. firm (Delphi).  

     Sommer-Allibert's automotive sales for 1999 were euro 2.1 billion.