Fiat Chrysler and PSA Group amid talks for a potential merger

Factors like global economic slowdown as well as increasing shift towards autonomous driving and electrification has forced automakers to join forces and share expenses for product R&D and manufacturing.

One such instance was seen recently when French car manufacturer PSA Group and Fiat Chrysler Automobiles NV revealed plans to ink a merger deal. According to reports, the move is slated to restructure the whole auto industry and produce a European brand that could compete head to head with Volkswagen AG.

Sources close to companies claim that both PSA and Fiat Chrysler are in talks, discussing the viability and opportunities for a merger. Also, it was speculated that under a recent proposal PSA could acquire the French entity, giving Fiat an advantage in regards to board seats.

According to an extraordinary meeting held by PSA, both the firms have come to a consensus on appointing PSA Chief Executive Officer Carlos Tavares as the CEO of the merged company while John Elkann, heir of Fiat’s founding Agnelli family, could become the chairman.

Reportedly, the talks follow PSA and Fiat Chrysler plans to explore a partnership on pooling investment to develop cars in Europe. It also follows the failed negotiations between the French rival Renault SA and Fiat Chrysler.

Reliable sources cite that the government of France would become a crucial player in this deal as it is one of the largest owners of PSA, a company that holds various brands like Opel, Citroen and Peugeot. However, there is a chance that both the firms could fail to reach an agreement for this merger.

Currently, Fiat Chrysler and PSA face the additional load of new emissions regulations in Europe which demands automobile industries to fulfill stringent fleet requirements by 2020. Meanwhile, representatives from PSA, the French finance ministry and Fiat Chrysler denied commenting on this development.
 

Source Credit: https://www.detroitnews.com/story/business/autos/chrysler/2019/10/29/fiat-chrysler-merger-potential-peugeot/40479051/