BY Richard Summerfield
Fiat Chrysler and rival PSA Group – the owner of Vauxhall and Peugeot – have reached a $50bn merger agreement which will see the companies remake the global automobile industry.
The merged company will employ around 400,000 people worldwide, with combined sales of 8.7 million vehicles. The firms say they have not decided which car production facilities the company will use. post-merger.
The deal, a 50-50 all-share merger, will create the world’s fourth-largest automaker when it closes. The parties expect the deal to be completed in around 12-15 months, pending shareholder and regulatory approval. The combination of Europe’s second and third biggest car manufacturers may attract significant antitrust scrutiny in the coming months, particularly as politicians and trade unions have vowed to resist any move to cut jobs.
Despite these concerns, the merger has the blessing of the French government, which owns 12 percent of PSA. The agreement “is very good news for France, for Europe and for our automotive industry”, said Bruno Le Maire, the French minister of the economy and finance in a statement. “It represents an important step in the creation of a European champion,” he added.
“Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology and services,” said Carlos Tavares, chairman of the managing board of Groupe PSA. “I have every confidence that with their immense talent and their collaborative mindset, our teams will succeed in delivering maximised performance with vigour and enthusiasm.”
“This is a union of two companies with incredible brands and a skilled and dedicated workforce,” said Mike Manley, chief executive of FCA. “Both have faced the toughest of times and have emerged as agile, smart, formidable competitors. Our people share a common trait - they see challenges as opportunities to be embraced and the path to making us better at what we do.”
News: Fiat Chrysler, Peugeot owner reach binding $50 billion merger deal