Fiat Chrysler Automobiles and PSA Merger Is Still on Track
Uncertainty may abound these days, but shareholders of Fiat Chrysler Automobiles (FCA) were reassured at their annual meeting that the proposed merger with the PSA group remains on track to be finalized by the end of the first quarter of 2021. The shareholders of the PSA group received the same message at their annual meeting this week, too.
After a year of planning, FCA and PSA announced their intention to merge 50-50 on December 18, 2019. The news follows many years of efforts by former FCA chief Sergio Marchionne to merge the company Italian-American with another automaker. This would reach the scale he believed necessary to succeed in an industry that depends on the development of expensive technology to switch to a range of electric and autonomous vehicles.
The merged PSA-FCA – no new names have been published – will be the fourth largest automaker in volume in the world. The two companies date back more than a century and bring a number of automotive brands with them, including Jeep, Ram, Dodge, Chrysler, Fiat, Maserati, Alfa Romeo, Lancia, Peugeot, Citroen, DS and Vauxhall-Opel. The expectation is that some of them will have to disappear; the stable is too full.
CFA CEO Mike Manley said work to complete the merger has continued at a brisk pace, despite a pandemic, to achieve the goal of finalizing the merger by the end of the first quarter of 2021. The new entity will have a more balanced structure. global footprint and financial flexibility to invest in new technologies. Its global reach for purchases and $ 4.2 billion in synergies between the two companies will translate into huge efficiency and capacity gains, Manley said at the shareholders’ meeting. The new company will have the attributes of being a successful leader in a new world.
Manley said the executives of the two companies have excellent personal relationships. FCA President John Elkann will chair the new group, PSA CEO Carlos Tavares will lead the new company, and Manley will hold a senior position, potentially chief operating officer.
In addition, Manley added that the investigation required by European Union antitrust regulators should not delay the merger and the proposed new company has already received antitrust approvals from the United States, China, Russia and from Japan.