Rumors of talks between the concerns FCA (FIAT-Chrysler) and PSA (Peugeot-Citroen) regarding a complete merger have been officially confirmed. The companies have announced that they are indeed moving towards a merger.
The Supervisory Board of PSA and the Board of Directors of FCA have unanimously agreed to move towards merging their businesses through a 50:50 merger. The managements of both companies have instructed the respective teams to work out solutions that will allow the signing of a memorandum of understanding in the coming weeks.
If a new supergroup is created, it will become the fourth in the world in terms of car production. In 2018, the companies sold a total of 8.7 million cars, which is more than General Motors was able to sell (8.4 million). At the same time, Volkswagen AG (10.8 million), Renault-Nissan-Mitsubishi (10.8 million) and Toyota Motor (10.6 million) will remain leaders.
It is expected that the annual benefit fr om the partnership will exceed €3.7 billion without plant closures. The companies plan to achieve a synergy level of 80% in four years. The one-time cost of optimizing the joint business is estimated at €2.8 billion.
It is assumed that the head of the new auto giant may be PSA chief executive Carlos Tavares. He has already proven that he knows how to bring car companies out of a protracted crisis: in 2017, the PSA concern bought the Opel brand from General Motors, which brought only losses for two decades. Less than a year later, the German brand went into the black.
Earlier, experts drew attention to the fact that 13.69% of PSA Group shares belong to Dongfeng Motor Group, and the US government is very strict about the possibility of leakage of American technology to China. In this regard, there is a risk that the Americans will block the deal.
As for the Russian automotive market, the emergence of a new global player is unlikely to have a significant impact on it. Today, the combined share of both concerns in our country is less than 1% of sales. Perhaps the deal will be more important in the commercial vehicle segment, wh ere FIAT, Peugeot and Citroen account for about 5%.
FIAT-Chrysler and Peugeot-Citroen agree on full merger
