RZD seals deal to buy Gefco


French auto maker PSA Peugeot-Citroën has completed the sale of 75% of its logistics subsidiary, Gefco, to JSC Russian Railways (RZD) for €800 million (US$1 billion).

It marks the first time that a Russian group has acquired a major logistics player in France, and probably in the EU.

The agreement was signed by PSA Peugeot Citroën Chairman, Philippe Varin, pictured left with Vladimir Yakunin, President of RZD, in Paris this week.

The transaction remains subject to antitrust approval, which is expected to be granted before the end of the year.

The carmaker said in a statement: “This agreement will enable Gefco to step up its expansion by combining its strengths with those of RZD and diversify its business base, thereby contributing to revenue growth.

“The new entity will be a global leader in diversified industrial supply chain logistics.”

It had previously highlighted that the transaction would further enhance Gefco’s geographic expansion strategy in countries such as China and India and also accelerate its growth in Eastern and Central Europe.

“RZD and Gefco would propose unrivalled logistics services between Europe and Asia”, it added.

Peugeot-Citroën announced plans for the part sale of Gefco in February, a disposal linked at helping turn around the car-making group’s fragile financial position.

In September, when news of the deal with RZD was announced, the Russian group said the purchase would enable it “to increase the attractiveness of transit cargo flows along the Europe-Asia transcontinental route”.

RZD said the next logical step was to “develop a sales network for transit transcontinental transport services via an international logistics company”.

Russian Railways taking control of Gefco could also have positive implications for Peugeot Citroën’s “mega-contract” with General Motors, announced in July.

This will see Gefco take on the major part of the US auto giant’s logistics provision in Europe (including Russia) from the start of 2013.