Fiat Chrysler and PSA of France signaled on Thursday that they took the decision to fuse and consolidate to become the fourth strongest automaker over the world. A brand that can produce slightly more cars than American icon general motors.
This decision is facing a lot of tensions because it focuses on technology that consists of a lot of investigations, the increase of global sales, and the consumers want to own cars. However, Fiat and PSA are not compatible partners.
The companies in china the biggest and largest market have few sales, in the European market as well. Those two companies are certainly combined their size: wit annual sales of 8.7 million vehicles, it would be the biggest automaker behind the Renault-Nissan alliance, Volkswagen and Toyota.
Fiat and PSA, with its Peugeot and Citroën brands, are seeking to better position themselves on the European market with the aim of getting ahead of Volkswagen and therefore becoming the market leader. They have a varied offer of ranges of sports vehicles whose buyers are rather European.Through all that the European market knew the biggest decline.
“Both groups would control Europe’s fastest-growing segment and the source of profits,” said Felipe Munoz, senior analyst at Jato Dynamics. “However,” he said in an email, “both companies lag behind rivals in terms of electrification.”
The decision was taken over successive meetings where they affirm what the companies described an intensive discussion with their great managers. They affirmed that this combination will low the cost of the industry as well as producing electric and autonomous vehicles. The general terms of the agreement were accepted and approved by the two boards.
Fiat Chrysler’s chief executive, Mike Manley, said the companies had “plenty of work to do” before reaching a formal agreement but declared that a merger “is very compelling” for both companies.
“A merger would bring together two strong and complementary businesses to produce a genuine, global mobility leader,” Mr. Manley said on a conference call to discuss Fiat Chrysler’s third-quarter earnings. “If we are able to finalize this transaction, there is significant potential value to be released.”
Carlos Tavares, considered as the most charming and tough by all the people that met him before, was elected as the chief of the new company, has already expanded PSA’s presence in Europe by acquiring Opel from G.M. in 2017.
John Elkann comes from a very powerful Agnelli family from Italy.
John Elkann, the chairman of Fiat Chrysler, is to be the chairman of the new company. He comes from a very powerful Agnelli family from Italy, who has had the Fiat monopoly for a very long time.
Mr. Manley did not discuss what his role would be in a merged company. He could stay on to run its North American operations, Fiat Chrysler’s main source of profit.
He won a big reputation while he was the big boss of the Jeep brand during a short period. He was named as a director in 2018 when his boss Sergio Marchionne died because of shoulder surgery.
The new company consolidated will be containing all the shares from the first and the second company, contributing 50 percent of the new entity. Shareholders of Fiat Chrysler will receive a special dividend of 5.5 billion Euros. PSA shareholders will receive a special dividend of about €3 billion from the sale of the company’s stake in Faurecia, an auto-parts maker.
