Fiat Chrysler, PSA in merger talks, WSJ says

TripleT

Well-known member
yeah, it will .....

Like I said wait for the papers to be signed first.... I been through this a few times myself.... No reason to get excited until then.
 

Bili

Official Pilot
Staff member
From ansa.it:

Green light for the merger between Fca and Psa. This was reported by the Wall Street Journal, citing some sources, according to which John Elkann will be the president of the new company and Carlos Tavares the managing director. The board of directors of PSA has approved the merger and that of FCA is scheduled - the Wall Street Journal reports - on the evening of Wednesday.

Psa should have six seats on the board of directors in the company that will be created by the agreement with Fca. According to the newspaper, the merger between the two companies has been approved. Five seats should go to Fca .

The agreement between FCA and PSA would lead to the creation of a 50 billion dollar (45 billion euro) automotive group, able to sell almost 9 million cars and place itself in fourth place in the global constructors' ranking . Sources from the French Ministry of Economy demand that the new possible automotive group confirm the existing commitments on the "creation of a European industrial battery supply chain".

The French state, which holds around 12% PSAs through BpiFrance, will be "particularly vigilant" on employment, governance and the industrial footprint of the new entity that could arise from a possible merger between PSA and Fiat-Chrysler and "follow with much attention and open discussions started "between the two groups, the sources continue in Paris. The sources also state that the merger "would make it possible to create the fourth world car group to respond to the new challenges of mobility. The two French manufacturers (Psa and Renault) - they specify in Bercy - would place themselves, with their respective partners (Fca and Nissan ), among the 4 first world manufacturers ". The discussions between the two groups would also confirm "the global consolidation movement of the car industry,

The hypothesis of the Italian-French wedding comes five months after the attempt to merge with the great rival of Peugeot, Renault, wrecked above all due to the lack of support for the operation of the French government, shareholder of both automobile companies. In recent years there has often been talk of negotiations between Fca and Psa, which have an ongoing collaboration for commercial vehicles at Sevel in Abruzzo, prolonged until 2023.

"On the FCA-Psa negotiation - said Economic Development Minister Stefano Patuanelli - we are observing what is happening. It is a market operation, I believe it is correct at this time not to make statements".

A tough trip comes from Jean-Pierre Mercier, representative of the French trade union CGT in the PSA group, against the possible merger project with Fiat-Chrysler (FCA). "As an employee of PSA I have no information", but I can say that "the merger would be in the interests of the shareholders" of the two automotive groups, he said interviewed live by BFM-TV. "We - he added - will not stop fighting for our interests, everyone must be aware of it". He added that the merger threatens to put jobs, salaries and "collective rights of employees in France as in Italy" at risk. Among other things, "the owners of the two countries would try to put workers in competition both in Italy and in France". "As employees we have common interests to defend", warned the trade unionist, recalling, among the another, the cuts suffered by "our friends of Opel in Germany, in England", after the Psa operation with Opel-Vauxhall. For Mercier it is always the same thing: "They want to increase the benefits to the detriment of workers, and this regardless of nationality. We have common interests to defend beyond borders", he reiterated. Asked what his message was today to the leadership of Psa, the trade unionist concluded: "Regardless of the decision whether or not to take a decision on the merger with Fca, the policy of destruction of labor and wages will raise the anger of the employees. And we militants of the CGT will be at their side ". For Mercier it is always the same thing: "They want to increase the benefits to the detriment of workers, and this regardless of nationality. We have common interests to defend beyond borders", he reiterated. Asked what his message was today to the leadership of Psa, the trade unionist concluded: "Regardless of the decision whether or not to take a decision on the merger with Fca, the policy of destruction of labor and wages will raise the anger of the employees. And we militants of the CGT will be at their side ". For Mercier it is always the same thing: "They want to increase the benefits to the detriment of workers, and this regardless of nationality. We have common interests to defend beyond borders", he reiterated. Asked what his message was today to the leadership of Psa, the trade unionist concluded: "Regardless of the decision whether or not to take a decision on the merger with Fca, the policy of destruction of labor and wages will raise the anger of the employees. And we militants of the CGT will be at their side ".

Along the same lines, Fiom : " The priorities are to re-launch development and production in Italy and protect employment. Since we are talking about an issue that concerns two multinationals and also two countries - observes Michele De Palma, Fiom-CGIL national secretary and automotive manager - it is essential that we do not review what happened with the Renault affair, but that the Government and the Presidency of the Council protects the research and development capacity we have in our country because the whole world of Italian components depends on this, in a moment of great transformation in the automotive sector. We have a common interest in our country and it is linked to the fact that there is an installed capacity to produce 1.5 million vehicles in Italy: any hypothesis of agreement, merger or joint venture must start from full employment and production of Italian plants " .
 

Bili

Official Pilot
Staff member
Fiat Chrysler et PSA vont officialiser leur fusion ce jeudi

The official engagement will be announced this Thursday. Having confirmed Wednesday morning to have discussions to "create one of the world's leading automotive groups," PSA and Fiat Chrysler (FCA) met during the day their respective advice - which have endorsed. According to our information, after several discussions each time overcame in recent years, "the two groups have this time found a satisfactory balance," says a source familiar with the case. They should announce their agreement to enter into exclusive negotiations, before a formal signature within a few weeks. The social partners have also been convened for an extraordinary meeting early this morning.

The two groups will merge equals by exchange of shares. Carlos Tavares, current chairman of the PSA board, will become the new group's managing director for a minimum of five years, while John Elkann, leader of the Agnelli family and president of Fiat Chrysler Automobiles (FCA), will retain the Presidency. The Board of Directors will have 11 members, including 6 from PSA (including Carlos Tavares) and 5 from FCA. The head office of the new entity will be established in a neutral country, the Netherlands, while the three operational headquarters will remain based in France, Italy and the United States.

Head office in neutral country
To rebalance the respective valuations of the two groups and achieve a 50/50 merger, they will undertake several operations: PSA will distribute to its shareholders its Faurecia shares (46% of the capital of the equipment manufacturer, valued at approximately 3 billion euros), while FCA will distribute to its shareholders an exceptional cash dividend of 5.5 billion euros.

So far, the negotiations had stumbled on questions of balance of capital and governance, neither of the two families, Peugeot or Agnelli, being really ready to let the other one become predominant in the new set. But the Agnelli hold much more in "their" constructor than the Peugeot: 29% approximately, against 12.2% of the capital (and 19.3% of the voting rights) for the French.

According to our information, the Peugeot family has finally let go of the ball on this point -conforted by a favorable governance: the participation of the Agnelli family will remain higher than that of the Peugeot (between 14.5%, against a little more than 6%). Double voting rights will be reset.

The state and Chinese Dongfeng will also have their say: both are also shareholders of PSA, with a participation equivalent to that of the family. In particular, Bercy argued that "the State will be particularly vigilant about the preservation of the industrial footprint, the governance of the new entity, the preservation of BPI's heritage interests and the confirmation of the new group's commitment to the creation of 'a European industrial battery industry'.

Number 4 worldwide
The operation would give birth to a new automotive giant, which with 8.7 million vehicles sold between them and 184 billion euros in turnover, become the world number 4 in the sector, behind Volkswagen, Toyota, and the Renault-Nissan-Mitsubishi Alliance. Thanks to its 14 brands, including 5 from PSA (Peugeot, Citroen, DS, Opel and Vauxhall) and 9 from FCA (Fiat, Chrysler, Alfa Romeo, Jeep, Abarth, Lancia, Maserati, Dodge), it would be present on all the automotive range, from basic to luxury. The two groups are also very complementary in geographical terms.

"This is a very nice operation, very logical for both groups ... much more than was a marriage with Renault," says a senior executive of the sector. After several attempts to merge with PSA, John Elkann finally turned to Renault last spring ... but the "deal" had turned in extremis without the agreement of Nissan partner, much to the chagrin of the president of Renault, Jean- Dominique Senard. While the priority within the Diamond is now to revive the Alliance, the Agnelli have therefore found it better to find another partner.

There is urgency: FCA, which has not invested enough in the renewal of its range or in its electrification, absolutely needs a partner to ensure its future. "There is no other possible than Renault or PSA! ", Analyzes a good connoisseur of the sector. For PSA, which is in great shape, this is the perfect opportunity to get out of its status as a regional manufacturer, and to amortize its investment in technology. The announcement has in any case boosted the two groups on the stock market: + 4.5% for PSA, and + 9.5% for FCA in the day of Wednesday.
 

Bili

Official Pilot
Staff member
Fiat Chrysler makes merger deal with Peugeot's Groupe PSA

Fiat Chrysler Automobiles NV and French automaker Groupe PSA have agreed to merge, according to Bloomberg, creating a truly global automaker seeking to compete in an industry evolving toward autonomy and electrification.

The combined company likely would be led by PSA CEO Carlos Tavares, 61, and its board would be chaired by John Elkann, chairman of FCA, according to a source familiar with the situation. FCA CEO Mike Manley, six years younger than Tavares, likely would become chief operating officer and run its North American operations from Auburn Hills.
 

Cody's Car Conundrum

Well-known member
@Muther Even if Peugeot doesn't have the same motorsports lineup that Renault currently does, they do have some brilliant hot hatches and some expertise in that area. IMHO this is still looking like a fairly good merger from an enthusiast perspective. What're your thoughts?

Also: New Dodge SRT-4 model when???
 

Blown7

Active member
For me..
I know Zero about Peugeot and a FCA merger..

I know Zero about Peugeot..

All I care about is .. John Elkhann is still seated at the top.... of whatever the new acronym is...

As long as a super chargered Hemi is in a FCA vehicle.. or Boosted six.. or The fastest whatever vehicle comes of this merger....

And it's in a Jeep...

I'm good.
 

AlexB

Well-known member
They would have among the strongest balance sheet of any Automaker with consistently over $15 billion of net cash.
$6 billion (U$D) will be paid out to FCA shareholders via special dividend.
 
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AlfaCuda

Member
I firmly believe that there’s room for a mid-premium brand. The 500/Mini covers this in city cars. Like it or not VW occupies this slot.

Also let’s not forget that Italian plant capacity is only 50% occupied. I believe a efficient and brave CEO like Tavares can take on VW with a revival of Lancia. It would certainly be better than the ground up DS badge which is a failure....
 

AlexB

Well-known member
I think this won't be FCA's last merger.
Because of the size of Merged FCA-PSA (profits,market cap, balance sheet),doing deals with GM,BMW or even hell Daimler (payback time)all become possible.
BMW or Mercedes fills the role & volume that Audi does for VW, and either one with Jeep + Maserati will serve the Company's Asian offerings (the high-end). As well FCA would get its In-House Finance company (Captiva) in the North American market which will be a big thing for RAM volume(its only Ford Credit).
 

Deckard Cain

Active member
I firmly believe that there’s room for a mid-premium brand. The 500/Mini covers this in city cars. Like it or not VW occupies this slot.

Also let’s not forget that Italian plant capacity is only 50% occupied. I believe a efficient and brave CEO like Tavares can take on VW with a revival of Lancia. It would certainly be better than the ground up DS badge which is a failure....
PSA was already moving up Peugeot to occupy that space. They don't need Lancia for that.
I see plenty of possibilities for the future though. They could use Lancia to sell rebadged Opels in Italy like they do with Vauxhall in the UK.

I don't think this will change much in the North American market but it's a shot in the arm for the european market. This also grants them a strong presence in China (PSA historically had a big foothold in China, not sure how they're doing now though).
And under the leadership of what is one of the best CEOs in the automotive industry I think this will lead to really strong development. This has me optimistic also because PSA is very agile in product development and launches. When they took over Opel they launched a bunch of models very quickly and I expect the same for Fiat and Lancia now.

This might also increase the likelihood of a new Giulietta with shared underpinnings with the new Peugeot 308.
 

Bili

Official Pilot
Staff member
Yes, new Giulietta, Mito and Punto should be possible. I think the new Corsa was realized on the CMP platform within 18 months after the Opel sale. Giulietta on EMP2?
I think that CMP is a nice platform for B segment cars and even C segment if they are positioned like Tipo. AFAIK new C4 is planned on CMP.
But CMP is not planned as PHEV. It will be BEV only. But than for such a small cars it's better to have a dedicated BEV platform and that's exactly what FCA is doing.

But IMO EMP2 sucks. No independent rear suspension for a compact, very little leg room at the back seat, no AWD option... Please kill it and develop Small Wide.

Actually except CMP I don't know what PSA could offer to FCA if we speak about technology.
 

Bili

Official Pilot
Staff member
I know that some guys(@Page2171) from the other forum are watching this and I know that they are hoping for new Chrysler products. Chrysler as brand. Dodge will get new products, no worry about it.

So can someone tell me how would Chrysler get a new product suitable for America when PSA is not making AWD cars, no petrol engine larger than 1.6... Please, tell me. How is Peugeot your saviour?

I think that North American business will more or less stay as it is. UAW workers don't have to worry for their jobs.
 

pumadog

Member
I don't have much knowledge about EMP2, but I like the proportions that CMP brings. As we don't know how far up Fiats electro platform will deliver, what could they choose:
A. Mini electro by FCA. Maybe also Mini "Classic" for 108, C1, new Adam if they plan successors
B. CMP incl. electro by PSA for cars and light crossovers. Small Wide for SUV incl. AWD
C. Small Wide or EMP2, whatever is better. Compact(Evo/US/Wide) seems to be dead (in Europe). Incl. hybrids
D. Um, EMP2 or Compact for mainstream FWD cars? Giorgio for premium/sporty brands of course, incl hybrid
E. Giorgio, GG or LX hybrid by FCA, incl hybrid and electro according to Maserati plans
F. Giorgio, GG or LX hybrid by FCA, incl hybrid and electro according to Maserati plans
Compact vans. CUSW (Pacifica) vs. EMP2 (Spacetourer/Zafira life)
Vans. *platform name?* merged already (Ducato, Boxer, Jumper, ProMaster)
 

Bili

Official Pilot
Staff member
@pumadog

I want to see end of EMP2.

Speaking of Pacifica. It was considered as a starting point for a working van. Replacement for PSA sourced Fiat Scudo. But FCA opted for Renault sourced Fiat Scudo.

I don't see anything changed in the next 2 or 3 years. Approved plans will go underway. But even with no shared platforms costs will be slashed due to volume.
 
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