Over the weekend, we heard some interesting news regarding the proposed merger between Fiat Chrysler Automobiles (FCA) and Groupe PSA (PSA) that both companies were expected to try to get final details involving the merger of both companies to create the world’s fourth-biggest auto manufacturer, sometime this week. Now according to Reuters and AutoNews Europe, we are hearing we might be hearing official details as soon as tomorrow.
People familiar with the situation, have told media outlets that the FCA board, had met to consider the deal that the PSA board had endorsed. Both sides are expected to released details on the signing of a binding memorandum of understanding. Sources are expecting that details would be dropped before the opening of European equity markets according to several sources.
Both companies have declined to comment on the current situation.
The merger of both companies would create the fourth-largest automaker in the world, surpassing other Detroit-based automakers Ford Motor Company and General Motors (GM). The proposed merger would create a 50-50 joint company, that would be based out of the Netherlands and would have a stock-market value of around $46 Billion USD. The company would be lead by PSA CEO Carlos Tavares, who would serve as the new company’s CEO, as well as current FCA Chairman John Elkann, who would serve as the company’s new Chairman as well.
There have been a number of things that have been questioning the timely manner of putting the deal together, such as the 10% ownership by the French government of PSA, as well as FCA’s purposed spinoff of their robotics subsidiary, Comau. Now, that the French government has given its approved, FCA will have to approve to keep Comau as part of the new company, according to Reuters. The details regarding how the two sides will split Comau has yet to be announced.
According to sources close to MoparInsiders, the core Mopar brands will be unaffected by the merger and their portfolios. Instead, future products like architectures, powertrains, and development would see potential benefits with shared technology between the two brands.
Stay tuned to MoparInsiders, as we will continue to cover details about the merger as they break.