French carmaker Peugeot’s shares soar on Iran deal

Shares in ailing French carmaker PSA Peugeot Citroen rose by up to five percent in early Monday trading, with the CAC-40 in Paris up only below 0.5 percent.

The stock jump came after the breakthrough in negotiations with Iran over its nuclear program, with the deal promising eased sanctions and with it greater export opportunities for PSA.

Peugeot cars are ubiquitous on roads in Tehran and the rest of the country, with the French auto maker having had extensive trade ties with Iran before international economic sanctions went into force.

Seeking fresh capital

But the Iran deal was not the only reason for the rise in shares. According to the French daily 'Le Monde', former Renault number two, Carlos Tavares, will be hired as head or co-head of PSA as of next year, supporting or replacing current chief Philippe Varin.

Talk of Tavares landing at Peugeot came amid reports the company was still in negotiations with Chinese carmaker Dongfeng about a potential capital injection.

PSA had reported falling sales for the third quarter as it continued to be in the throes of a radical restructuring, involving job cuts and the closure of a large factory.