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October 31, 2019

Fiat Chrysler Confirms Merger Talks with Peugeot Citroen

After Nissan blocked a potential merger with Renault, Fiat Chrysler Automobiles or FCA seems to have found a potential new partner: PSA. After reports on a potential business combination emerged, FCA has confirmed that talks are underway with the parent company of Peugeot, Citroen, and Opel.

The merger, worth USD 50 billion could potentially transform the global automotive industry given that it will form the fourth largest auto manufacturing group. The merger could also help leverage technical expertise from both groups to help them with challenges such as electrification. Moreover, the merger could help save around 4 billion euros.

While FCA has yet to comment on the details of the proposed merger, Reuters cites sources that the merger will entail a 50/50 share swap, creating a new company formally based in the Netherlands. In terms of board structure, the combined company will have 11—six from Peugeot’s side, and five from Fiat Chrysler’s.

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