Banco Santander and PSA Peugeot Citroën are close to a deal where the Spanish bank finances the manufacturing process for the French car company. Santander would manage new debt for car manufacture starting in the second half of 2015.
Santander will end up buying a chunk of Peugeot's debt. The alliance will strengthen Santander's position in Europe by allowing it to penetrate France and Switzerland. Peugeot will mostly reap near-term benefits from the deal, which allows it to get quick cash to clean up an ugly balance sheet. Santander is preparing itself for an onslaught of spending once the banks start lending again.