FCA, Peugeot agree to merger as automakers race to modernize
Peugeot (PSA) and Fiat Chrysler (FCA) confirm their intentions to merge, which could result in the world’s fourth largest automaker.
The new company will be listed in New York, Paris and Milan. John Elkann to become FCA chairman and Carlos Tavares to take over as Peugeot CEO.
A possible merger of companies will create an industrial a giant with 8.7 million vehicle sales, a turnover of $ 190 billion and a total of 400 thousand employees.
Volkswagen Group, Renault-Nissan and Toyota ranked first three among the world’s leading car makers in vehicle sales in 2018.
«The dialogue between the parties led to the idea of creating a new group with a global scale and resources, 50% owned by Groupe PSA shareholders and 50% by FCA shareholders», – it says in a joint statement.
«In a rapidly changing environment, with new challenges associated with electrified, shared and autonomous mobility, the combined organization will leverage its strong global research and development ecosystems to drive innovation and address these challenges with high speed and capital efficiency», – reported in a published press release.
Early reports of merger talks that will create a new group worth about $ 50 billion have changed share prices for both automakers. Italian-American carmaker Fiat Chrysler on Tuesday showed growth of its shares by 8%, and on Wednesday added another 5%.
CEOs Briefed US and French Regulators. Confirmation of the deal came about five months after Fiat Chrysler ended merger negotiations with French rival PSA., Renault. but the new merger is unlikely to face the same interference by the French government.
French Finance Minister Bruno Le Maire said in a statement that he welcomes the deal, but said France will be particularly vigilant about maintaining its industrial footprint in the country and the location of its headquarters..
«France should be proud of its automotive industry, which has demonstrated its potential for research and technological innovation, especially in the field of electric vehicles and hybrid vehicles.», – he said.
The new councils are now expected to conclude discussions in the coming weeks and prepare a memorandum of understanding.
Prior to the start of the deal, FCA announced that it would distribute a special dividend of € 5.5 billion to its shareholders, as well as its stake in its subsidiary Comau.. Peugeot said it will transfer 46% of the shares of the car supplier Faurecia to its shareholders.