Peugeot and Fiat look to merge for greater global scale
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Thread: Peugeot and Fiat look to merge for greater global scale

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    Default Peugeot and Fiat look to merge for greater global scale

    Peugeot and Fiat look to merge for greater global scale - FT.com

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    July 24, 2014 3:29 pm
    Peugeot and Fiat look to merge for greater global scale
    By Arash Massoudi and Henry Foy in London and Michael Stothard in Paris

    PSA Peugeot Citroën and Fiat-Chrysler are evaluating a deal that would create the world’s fifth-largest carmaker producing about 8m cars and giving both struggling companies global scale.
    The French and US-Italian carmakers have held informal discussions about a merger earlier this year, according to sources familiar with the talks, as both companies consider a range of options to address their shared problems of high costs and patchy emerging market exposure.

    Any deal would bring together two of Europe’s most venerable automotive houses and carmaking family dynasties in an effort to tackle spiralling investment needs at both groups.
    The two companies held talks that were paused by the completion of Dongfeng’s investment in PSA, people briefed on the talks said, stressing that the discussions are preliminary in nature and any major movement is expected next year.

    They see benefits in combining Fiat and Peugeot’s European operations and leveraging Chrysler’s US presence, while PSA’s Chinese shareholder Dongfeng Motor would provide greater Asian access and fresh capital, according to four people with knowledge of the talks.

    The talks are part of a range of potential options to fix problems at both companies, which this year have their hands full dealing with their own separate restructuring programmes.

    Fiat only this year completed its acquisition of Chrysler, with the new Fiat Chrysler Automobiles due to be listed in the Netherlands in August, while PSA completed a tie up with China’s Dongfeng in January and is making an Asian push.

    “Negotiations have not started yet, but there have been discussions and I believe that 2015 will be a critical year,” said one Paris-based banker with knowledge of the talks.
    A spokesman for Fiat-Chrysler said that the company was not currently in talks with PSA. “We have discussions with everyone on targeted projects,” the spokesman added.
    PSA declined to comment.

    Sergio Marchionne, Fiat-Chrysler CEO is widely credited with rescuing Fiat from potential collapse with his audacious takeover of Chrysler and has said he is keen to do more deals, joint ventures or tie-ups with rivals.
    He recently told the Financial Times he was open to “various options” to cure Fiat’s capacity ills in Europe, Chrysler’s lack of emerging market exposure and a lack of available capital to invest in both.
    If the deal talks progressed, the combined group would produce about 8m cars a year, making it a potential challenger to Volkswagen, Toyota and General Motors, the industry’s three biggest players.
    “It is not surprising that this may be an option being looked into,” said Stefano Aversa, head of the automotive practice at AlixPartners, a consultancy. “PSA is one of the very few large manufacturers that is not historically aligned with any other and there are obvious benefits for both groups.”

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    dvr
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    So will that make them similar to the former BMC. Now there was a great company...



    ...not
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    1000+ Posts gerry freed's Avatar
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    Both the managements of PSA and Chrysler-Fiat deny that any such negotiations have taken place over the last year.
    Think Global - Ride on Spheres

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    Time will tell.

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