Steel Markets

Merger for FCA and Peugeot

Written by Sandy Williams

FCA and Peugeot announced a $48 billion merger on Thursday that will make the combined company the fourth largest automaker in the world. The 50/50 merger will have combined revenues of nearly $190 billion and annual unit sales of about 8.6 million vehicles. Together the company will employ roughly 410,000 employees.

Peugeot parent PSA Group and Fiat Chrysler agreed that FCA Chairman John Elkann will be chairman of the combined company and PSA CEO Carlos Tavares will become CEO. The company will be headquartered in the Netherlands.

The merger will help fund the research needed to transition from gas-powered vehicles to electric, said Jessica Caldwell, director of industry analysis at Edmunds.

“The electrified, autonomous future everyone is waiting for just isn’t feasible without automakers merging and forming strategic alliances to share research and development costs,” said Caldwell in a comment to CNN. “This is a smart move by both Fiat Chrysler and PSA to ensure their companies continue to be viable and relevant as the industry evolves.”

FCA and PSA expect $4.1 billion in estimated annual run-rate synergies based on more efficient allocation of resources for large-scale investment and purchasing capability, and without plant closures..

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