Fiat Chrysler and Peugeot Sign a Merger Agreement

Fiat Chrysler and Peugeot have signed a merger agreement that will lead to becoming a new company the fourth biggest player among automakers in the world.

The Conditions

According to Bloomberg , automakers Fiat Chrysler (Italy) and the French PSA Group (Peugeot and Citroen brands) signed a merger agreement. The capitalization of the new company will be $ 46 billion.

The companies agreed to merge 50/50. The boards of directors approved the merger back in October 2019. The combined company will be led by PSA Group CEO Carlos Tavares. Fiat Chrysler CEO John Elkan will take a similar position in the new company. The largest shareholders of the companies which are EXOR NV, Bpifrance, the Peugeot family and the Chinese Dongfeng promised to vote in favor of the deal at extraordinary meetings. Besides, Dongfeng, which owns 12% of the PSA, agreed to sell 30.7 million shares. Thus, the investor will have only 4.5% of the shares.

The capitalization of the new company will be $ 46 billion, and the synergistic effect of the transaction is estimated at 3.7 billion euros per year. The transaction is planned to be completed in the next 12-15 months. The combined group will be based in the Netherlands.

As noted, the merger will not lead to the closure of any plant. Besides, after the merger, automakers plan to share technology and share the cost of producing electric cars as well as unmanned ones.

More than 400 thousand employees will work at the production of the new auto giant. It is estimated that the expected annual income will be about 170 billion euros. At the same time, it is planned to sell 8.7 million cars annually. Only Volkswagen, Toyota and the French-Japanese Renault-Nissan group have more of these sales volumes. The new group will have an annual turnover of nearly 170 billion euros and an annual income from operations of more than 11 billion euros ⏤ without Magneti Marelli and Faurecia.

The PSA Peugeot Group is owned by Citroën, Process Conception Ingénierie (PCI), Banque PSA Finance, Peugeot Citroën Moteurs (PCM), Faurecia, DS Automobiles. In 2017, the group acquired the German company Opel and the British Vauxhall.

Fiat-Chrysler Corporation owns Chrysler, Dodge, Mopar and SRT, Fiat Professional, Jeep, Lancia, Ram Trucks, Fiat, Abarth, Alfa Romeo, Maserati, Magneti Marelli, COMAU, Teksid.

However, it is still difficult to assess how successful the merger of FCA-PSA will be because the production of different cars on the same platform is a very ambiguous thing. In addition to the popular triplets Volkswagen Touareg, Audi Q7, Porsche Cayenne and other successful relatives of VAG, history knows several negative examples. It is hardly a good decision to take over the South Korean company Daewoo American General Motors, after which there is only one still produced small car Aveo.

What to Expect?

The long-suffering Chrysler, which is now under the wing of Fiat, has already experienced the fate of the combined automotive platforms, releasing its 300C sedan and SUV sub-brand Grand Cherokee Jeep in collaboration with Mercedes-Benz and their similar models. The result was controversial, and joint projects from the management of Fiat and Peugeot become even more interesting.

Will the very hot Peugeot 508 become a donor for the next Chrysler 200? Will there be Dodge Hellcat versions for Citroën models? Will companies dare to launch a new generation Opel Speedster convertible based on the Alfa Romeo 4C? This topic gives a lot of reason for speculation, but the real projects of the new FCA-PSA concern will still be secret in the near future.

In order not to guess at the Italian-American-French coffee grounds, it is easier to find out which cars the users on the network are waiting for from a fresh association.

● Sedans. Today, one of the most popular and practical cult four-door sedans from brands that will soon enter the new corporation are the Chrysler 300, Alfa Romeo 159, Lancia Thema, Maserati Quattroporte, Opel Omega. Different experts call these models the best and most terrible cars of their time, but all of the listed cars could fall in love with the people they are designed for. Considering the recently introduced and very promising Peugeot 508, as well as the fantastically beautiful sequel to the Alfa 159 - Giulia, it is possible that these cars can serve as a platform for future novelties from Chrysler, Alfa Romeo, Lancia, Opel, and even Maserati. A modern rear-wheel or all-wheel drive sedan with Italian appearance, American comfort, a German character, and a new French charm - this Frankenstein will certainly interest buyers or at least make you attract attention.

● Electric cars. What do automotive engineers build? All types of cars and electric cars, in this case, aren’t an exception. FCA-PSA will need to take into consideration the need to develop all-electric cars. The ongoing efforts of Fiat and Peugeot are not enough: the most popular is only the hybrid version of the new Chrysler Pacifica. It is noteworthy that Maserati and Jeep announced their intentions to create electric versions of cars, so Fiat Chrysler will also be able to surprise us as well. Against the background of the news about the merger of auto corporations, last year's Peugeot e-Legend electric car concept also looks logical. The French showed a model in the style of the classic Peugeot of the 1960s, which was supposed to accelerate from zero to 100 km / h in less than four seconds thanks to electric traction, and travel up to 600 km on a single charge.

● Crossovers. Of course, crossovers today are the most popular and best-selling types of cars, therefore, it is obvious that companies must create the conditions for the production of new joint models that satisfy customer needs. Now the companies have at their disposal the new Opel Grandland X and Peugeot 3008. In the future, these models can reincarnate the once-popular Chrysler crossovers in the USA, placing them in a European size frame.

One way or another, there are a lot of options for the development of cars within the framework of this concern, and most importantly, at least a couple of them should become successful among users and shake the more and more standardized industry.