Chrysler News: FCA and Groupe PSA Sign Merger Agreement

[Drew Dowdell]

Fiat Chrysler Automobiles and Peugeot S.A. have signed a binding agreement to a 50/50 merger of their businesses. Once the merger is complete, the combined company will be the fourth largest automobile producer in the world.  Based on 2018 numbers, the business will sell roughly 8.7 million vehicles annually and have revenues near €170 billion. There will be a strong balance sheet that will allow the new entity headroom to execute strategic plans. Geographically, 46% of revenue will come from Europe and 43% from North America.

A number of operational efficiencies will be gained by the sharing of platforms and engine technology. The number of platforms will be reduced with approximately 6 million cars a year concentrated on just two platforms.The platform consolidations will account for approximately 40% of the estimated €3.7 billion in savings expected from the merger. 

Peugeot CEO Carlos Tavares will be CEO of the new company and a board member, while John Elkann of FCA will be Chairman of the Board. The completion of the combination is expected to take 12 to 15 months during which time they will be completing items to the satisfaction of antitrust and other regulatory requirements.

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[riviera74]

Sergio's dream now is coming to fruition.  After said merger, I wonder if they can really keep all those plants running.

[smk4565]

Agreed on Sergio's dream and I have to imagine some stuff gets consolidated or some factories closed in time.  Tavares didn't take dead weight like Opel and Vauxhaul and turn the PSA operation profitable by not making tough decisions and wasting money.  

89% of revenue from North America and Europe, and China is the largest market?  I imagine they will look to change that and grow in China, maybe another partner coming.

Edited December 18, 2019 by smk4565

[David]

Month 16 and the Axe will fall on profit loosing products. Bye Bye Alfa, Fiat, Chrysler, etc.

[smk4565]

Sergio was sentimental and sympathetic to Fiat and Alfa, while the Chrysler guys feel the same about Dodge/Chrysler.  Tavares has no sentimental feelings to either, so they have to perform or go.