The two-car groups have confirmed that they are in the midst of negotiations for the creation of a new global player valued at more than 50 billion dollars.
After his failed marriage attempt with the Renaut-Nissan Alliance, Fiat-Chrysler could merge with the PSA group. The two actors confirmed that they had started negotiations for a rapprochement, as revealed by the Wall Street Journal.
Make PSA and Fiat-Chrysler 4th global automaker
These discussions have been taking place since last March. Carlos Tavares, CEO of the PSA Group, and Mike Manley, his counterpart at Fiat-Chrysler, would have met at the Geneva Motor Show to discuss the idea of a partnership.Points of disagreement nevertheless quickly emerged and the Italian group has preferred to dig the idea of a merger with Renault, a project finally quickly buried because of the demands of the French state, a shareholder of the automobile group.
Now, if they go through this process, PSA and Fiat-Chrysler companies will give birth to an industrial group valued at more than 50 billion dollars and placed fourth in the world of car manufacturers, behind Volkswagen, Renault-Nissan-Mitsubishi, and Toyota. In fact, the numbers are not deceiving and the people involved sold 8.7 million vehicles to each other last year.
An agreement of reason to prepare for the transition to electric
Such a merger would then allow the two companies to pool their skills to face a market in full transformation. New car sales are eroding year after year and manufacturers are now turning to electric cars.However, Fiat-Chrysler has fallen behind in this area and an association with the PSA group would be profitable for the production of its next vehicles. The groups would also share their technological advances to gain valuable time against their competitors.
In principle, PSA investors reacted positively to this announcement. The action of the French car group jumped 7% at the opening of the Paris Bourse this morning; Conversely, the Renault shares lost 3.8%.
Source: Reuters
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