Fiat Chrysler, Peugeot Citroën Plan $50 Billion Merger of Equals

By Jesse Sokolow on 31 October 2019
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Citroën 2CV – the “deux chevaux” – on the streets of New York

Fiat Chrysler Automobiles and Groupe PSA unveiled plans to merge on Thursday in a $50 billion deal would result in an automaker that would effectively eclipse such rivals such as General Motors, Ford, and Hyundai-Kia to effectively become the fourth largest carmaker in the world behind Volkswagen, Renault-Nissan, and Toyota.

The deal, if concluded, will mark one of the biggest auto industry consolidation deals in decades although the combined company will need to address multiple problems at Fiat Chrysler including an aging model lineup, a lack of investment in new technologies such as drivetrains for electric vehicles, and dependence on a single region, North America.

The move comes five months after a failed attempt by Fiat Chrysler to merge with Renault.

Fiat Chrysler and PSAshareholders will each initially own 50% of the combined company.  Fiat Chrysler’s current chairman, John Elkann, will become chairman of merged entity upon closing while Peugeot CEO Carlos Tavaras will serve as chief executive officer.

FCA’s portfolio of automakers includes Chrysler, Dodge, Jeep, Ram, Fiat, Alfa Romeo, and Maserati, while PSA is the parent of French brands Peugeot and Citroën, the upscale offshoot Citroën DS, as well as of two former General Motors units, Opel and Vauxhall. In addition, PSA acquired Chrysler’s failing Chrysler Europe unit in 1979 although the remnants of that were dissolved in 1992.

Once the merger closes, the combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler, although it will maintain a headquarters office for its North American operations near Detroit.

Shares of the new company will be traded on the Euronext in Paris, the Borsa Italiana in Milan, and the New York Stock Exchange in the United States.

(Photo: Accura Media Group)