Staff Writer - CheersandGears.com
October 31, 2012
Bloomberg is reporting that earlier this month, Fiat CEO Sergio Marchionne sat down with PSA-Peugeot/Citroen GM earlier this month about creating an alliance that would become the largest automaker in the region.
Marchionne's proposal was to have the three companies form an alliance in exchange for stock. Marchionne also had another proposal on the table where Fiat would take Opel off GM's hands if the company was given between $5 to $7 billion in cash for restructuring costs.
PSA-Peugeot/Citroen passed on the alliance because it favors its partnership with GM. Also, if PSA-Peugeot/Citroen went ahead with this idea, this would have complicated a $9.1 billion guarantee from the French government.
“It’s an indication that it’s getting increasingly difficult, especially for the southern European carmakers. Marchionne seems to be afraid to go under in the wave of joint ventures in Europe,” said Frank Schwope, an analyst with Norddeutsche Landesbank Girozentrale.
“Don’t read anything into having a coffee at the bar. There are other things than combinations and mergers that people talk about from time to time,” said Marchionne when asked about this.
General Motors and PSA-Peugot/Citroen declined to comment.
William Maley is a staff writer for Cheers & Gears. He can be reached at email@example.com or you can follow him on twitter at @realmudmonster.