Peugeot & Fiat Chrysler merger to result in world’s fourth largest auto company

November 1, 2019

Peugeot & Fiat Chrysler merger to result in world's fourth largest auto company

Plans have been announced that will see auto makers Peugeot S.A (Groupe PSA) and Fiat Chrysler Automobiles (FCA) merge, creating the fourth largest global OEM in terms of unit sales, with combined revenues of almost €170 billion. 

The companies stated that the Supervisory Board of Peugeot S.A. and the Board of Directors of Fiat Chrysler Automobiles have each unanimously agreed to work towards a full combination of their respective businesses by way of a 50/50 merger. Both boards have given the mandate to their respective teams to finalise the discussions to reach a binding Memorandum of Understanding (MoU) in the coming weeks.

The plan to combine the Groupe PSA and FCA businesses is said to follow intensive discussions between the senior managements of the two companies. Both reportedly share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to effectively manage the challenges of a new era in mobility.

With combined unit sales of around 8.7 million vehicles, there is estimated to be approximately €3.7 billion in annual run-rate synergies derived principally from a more efficient allocation of resources for large-scale investments in vehicle platforms, powertrain and technology, and from the enhanced purchasing capability inherent in the combined group’s new scale. It was added that these synergy estimates are not based on any plant closures.

The shareholders of each company would own 50% of the equity of the newly combined group and would therefore share equally in the benefits arising from the combination. The transaction would be affected by way of a merger under a Dutch parent company and the governance structure of the new company would be balanced between the contributing shareholders, with the majority of the directors being independent. 

The board would be composed of 11 members. Five board members would be nominated by FCA (including John Elkann as Chairman) and five would be nominated by Groupe PSA (including the Senior Independent Director and the Vice Chairman). The Chief Executive Officer would be Carlos Tavares for an initial term of five years, and he would also be a member of the Board.

“This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity. I’m pleased with the work already done with Mike and will be very happy to work with him to build a great company together,” stated Carlos Tavares.

Mike Manley added, “I’m delighted by the opportunity to work with Carlos and his team on this potentially industry-changing combination. We have a long history of successful cooperation with Groupe PSA and I am convinced that together with our great people we can create a world class global mobility company.”

The new group’s Dutch-domiciled parent company would be listed on Euronext (Paris, France), the Borsa Italiana (Milan, Italy) and the New York Stock Exchange (USA), and the group would continue to maintain significant presences in the current operating head-office locations in France, Italy and the USA.

www.groupe-psa.com 

www.fcagroup.com

Latest Industry News

Download the latest issue of PM Review

Our latest issue is now available to download in PDF format, free of charge.

As well as an extensive Powder Metallurgy industry news section, this 108-page issue includes the following exclusive articles and reports:

  • Fukuda Metal Foil and Powder Co., Ltd: Three hundred years of metal powder production in Japan
  • Strategies and initiatives for cost-affordable PM Ti alloys: Compositions and manufacturing
  • Nichols Portland: The world’s first manufacturer of gerotors continues to innovate
  • MPIF’s 2019 PM Design Excellence Award winning parts highlight wide variety of applications
  • APMA 2019: India welcomes the fifth International Conference on Powder Metallurgy in Asia
  • More information

Industry News

E-newsletter

Sign up to our free e-newsletter, sent weekly to industry professionals around the world. We'll also let you know each time a new issue of PM Review magazine is available.

Subscribe for a FREE digital magazine

PM Review is the leading international magazine for the Powder Metallurgy industry.
Published four times a year, it is available as a free download or through a print subscription

Connect with us

Powder Metallurgy:The original net-shape production process

Powder Metallurgy components are relied upon by a wide variety of manufacturing industries, from automotive to power tools, household appliances, chemical engineering, filtration and more.

The main reason for the technology’s success is its cost-effectiveness at producing high volumes of net-shape components, combined with its ability to allow the manufacture of products that, because of the production processes, simply cannot be manufactured by other methods.

To discover more about how the technology has revolutionised component production, browse our Introduction to Powder Metallurgy.

Latest industry news