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FCA, PSA Group Sign $50 Billion Merger Deal

FCA, PSA Group Sign $50 Billion Merger Deal

Fiat Chrysler Automobiles and PSA Group have reportedly signed off on a merger deal worth about $50 billion.  The deal will create a combined automaker that sells around 8.7 million vehicles per year.

Reuters reports the two automakers could make the formal merger announcement as early as later this week. The announcements will undoubtedly provide additional details of the combination, but it is expected that PSA Group’s Carlos Tavares will be the CEO of the new automaker. FCA Chairman John Elkann is expected to be the chairman of the new entity as well.

One additional detail that is leaking out is the fate of China’s Dongfend Motor Group, which has a 12.2 percent equity stake in PSA Group. As part of the merger Dongfend’s stake will likely be reduced to 4.5 percent, a move that will likely satisfy regulators in Europe and North America.

Ultimately the two automakers are linking up to survive a rapidly changing industry. FCA will gain access to PSA’s more modern architectures; enabling it an easier path to electrification and additional scale. Meanwhile, PSA Group will get a piece of FCA’s high-margin brands Jeep and Ram, as well as a distribution network in North America.

Expect to hear further details surrounding this historic merger once both automakers confirm the agreement has been signed.





 

About Nick Saporito

AutoVerdict Senior Editor Nick Saporito began writing about cars at age 13. Nick ran a couple of automotive enthusiast sites for several years, before taking some time off to focus on his career and education. By day he's a marketing executive in the telecom world and by night he hangs out here at AV. You'll find him focusing on tech, design and the industry's future.
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