France eyes deals for Airbus, Peugeot, farming as Iran visits

PARIS (Reuters) - France and Iran hailed a set of business tie-ups and export deals on Thursday including the sale of dozens of AIRBUS (EAD.PA)(EAD.MC)planes and a car factory revamp that re-ignites a decades-old relationship between Tehran and carmaker PEUGEOT (UG.PA)

The deals, some of which were not yet finalised, were announced at a Franco-Iranian business forum attended by Iranian President Hassan Rouhani and a host of ministers and business leaders.

The visit follows a deal between Iran and the west on the middle-eastern country's nuclear programme that resulted in the lifting earlier this month of trade sanctions.

With four business arrangements flagged by France's main industry body including the PSA Peugeot Citroen tie-up and a plan to sell over 100 Airbus passenger planes, French Prime Minister Valls said there would also be agreements signed in the areas of health, agriculture and the environment.

The deals come despite a background of continued diplomatic tension with France, one of Iran's fiercest critics during the sanctions-lifting talks, and as human rights protests against the visit took place in the French capital.

"Let's forget past differences and start anew," Rouhani said in a speech to the forum.

Exactly what stage the Airbus deal was at remained unclear on Thursday, but French officials said Iran was putting the finishing touches to the deal.

Iranian Transport Minister Abbas Akhoundi told Reuters Iran had reached a deal with the planemaker, but declined to give further details. Technical talks were continuing, people close to the discussions said. Iran earlier this week gave estimates between 114 and 127 Airbus planes. Airbus declined comment.

Pierre Gattaz, head of France's Medef employers association, said French national railway operator SNCF and aluminium company Fives were also expected to unveil deals.

"Iran's needs are enormous," Gattaz told reporters. "Iranians need everything. The country is not starting from scratch, it's got a very educated workforce, a real development potential."

For Peugeot, racing to expand outside Europe after a brush with potential bankruptcy, the Iranian factory tie up is critical. The company said recently it was counting on Iran for about 400,000 annual vehicle sales by 2020. When it suspended sales in Iran in 2012 it lost nearly 10 percent of global deliveries and interrupted a relationship with Iran that dates back more than 50 years.

Under the deal announced on Thursday but whose final signature will not be made until the middle of this year, Peugeot and Tehran-based Iran Khodro plan to modernise a factory near Tehran and be producing cars by mid 2017.

The initial production target is 200,000 vehicles a year and the joint venture will make Peugeot 208, 2008 and 301 models with a Peugeot investment of 400 million euros ($436 million) over five years.

French President Francois Hollande and Rouhani should raise major human rights concerns in both countries during the visit, Human Rights Watch said in a statement.

Issues include the death penalty, the abuse of rights of women and minorities in Iran, and the state of emergency declared by President Hollande after Islamist militant attacks in Paris on Nov. 13 last year that threaten rights to liberty and freedom of movement in France, it said.

($1 = 0.9172 euros)

(Additional reporting by Tim Hepher, Michel Rose, Bate Felix, Gilles Guillaume and James Regan; Writing by Andrew Callus, editing by Leigh Thomas)

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