Published: Sat, November 02, 2019
Money | By Ethel Goodwin

After Failing to Marry Renault, FCA Is Now Engaged to PSA

After Failing to Marry Renault, FCA Is Now Engaged to PSA

By comparison, both Volkswagen and Toyota sell over 10 million cars a year, while the Renault-Nissan-Mitsubishi alliance nearly 11 million. Germany's Volkswagen and Toyota from Japan would remain first and second, respectively, according to information from research and data firm Statista.

The deal would create the fourth largest auto manufacturer globally in terms of annual sales, at 8.7m vehicles, behind Volkswagen Group, Toyota and the Renault-Nissan-Mitsubishi alliance, as well as revenues of €170bn (Rs 1,333,650 crore) and recurring operating profit of over €11bn (Rs 86,295).

"If this is getting done now, it's because Tavares was in the driving seat", a banking source in France said of the merger discussions between PSA and FCA.

The merger decision comes about five months after a similar deal with French automaker Renault fell apart, mostly over French government concern about the role of Renault's Japanese alliance partner Nissan. That did not take place this time around.

Fiat Chrysler and Groupe PSA, the owner of Peugeot, agreed on Thursday to combine forces to create the world's fourth-largest carmaker by production volume.

Shareholders in each company would each own 50% of the newly combined group, which will be formed under a Dutch parent company that will be listed on the Paris, Milan and NY stock exchanges.

The combined group would include the Fiat, Jeep, Dodge, Ram, Chrysler, Alfa Romeo, Maserati, Peugeot, DS, Opel and Vauxhall brands, serving mass and premium passenger auto markets as well as trucks and light commercial vehicles markets.

Cassidy says any merger is about sustainability, quoting former president and CEO of Fiat Chrysler, Sergio Marchionne.

Given that it is a 50/50 merger, Cassidy hopes it will open Fiat Chrysler to new markets. Groupe PSA CEO Carlos Tavares is touted to run the business side of things, while FCA CEO John Elkann is set to become the merger's chairman. PSA executives had been preparing to brief French unions Thursday morning, they said.

Manley called it "an industry-changing combination", and noted the long history of cooperation with Peugeot in industrial vehicles in Europe. "This is a smart move by both Fiat Chrysler and PSA to ensure their companies continue to be viable and relevant as the industry evolves".

FCA has already been in the news this year regarding mergers. Peugeot, Citroen, DS, Vauxhall and Opel hail from the French automaker.

The Dutch parent company would be listed on the Paris, Milan and New York Stock Exchanges and maintain presence in current head offices in France, Italy and USA.

A combination with PSA would give FCA access to the French group's CMP modular platform, which was launched in 2019 for Peugeot's e-208 compact city vehicle, and donated for Opel to build the Corsa-e mini.

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