Peugeot, Fiat Chrysler aim to close merger deal before year's end

A few weeks ago, Groupe PSA (Peugeot, Citroen, DS, Opel, Vauxhall) and Fiat Chrysler Automobiles (FCA) shocked the automotive industry. It was the announcement of their merger, one that would see equal shares between the two automotive giants.

Upon the announcement, the two companies said that negotiations and the signing of the contract will take place in the coming weeks. Now, it seems both are getting closer to a deal and that the memorandum of agreement will be finalized sooner than we think. PSA and FCA have told key employees that they will be signing the paperwork before the end of the year. They didn't say when exactly, but one the ink dries, the merger will see 13 brands under one roof.

FCA chairman John Elkann said that he is confident in the deal while PSA CEO Carlos Tavares expressed the same sentiments. Once bound, it will turn PSA-FCA into the fourth largest automotive company in the world, just behind Toyota, Volkswagen Auto Group, and the Renault Nissan Mitsubishi Alliance.

Part of the deal is to share technologies, platforms, powertrains, and more, among all 13 brands under their respective wings. The deal also says a 50:50 partnership between the two. Leadership roles have yet to be mentioned, but Groupe PSA CEO Carlos Tavares is expected to run the operations of the merger, while FCA CEO John Elkann is touted to be the chairman of the two automakers. Their respective tenures will last for five years.

Projections? Both are expecting a combined sales output of approximately 8.7 million cars, trucks, and SUVs worldwide. They are also targeting $190 billion in turnover during the initial phase of the partnership.

From what we're seeing, it seems that Group PSA's re-entry into the North American market will be done via FCA, while FCA aims to strengthen their European arm through PSA. After all, the French company is the third-largest in the continent, so their input should prove helpful for the Italian-American automaker. On the other hand, success has eluded PSA for the longest time, with Peugeot pulling out in the US and Canada in the mid-90's. As the global market becomes more inclusive, both seek to make their vehicles true world cars.

Groupe PSA-FCA consists of Peugeot, Citroen, DS, Opel, Vauxhall, Fiat, Alfa Romeo, Maserati, Lancia, Chrysler, Dodge, Jeep, and Ram.

Source: Reuters