Fiat Chrysler and PSA Group exploring potential merger

Fiat Chrysler Automobiles N.V (FCA) and PSA Group (Peugeot S.A) are exploring the potential the merger. According to Bloomberg deal would reshape the globe automotive industry and it would create a Europe powerhouse to rival Volkswagen AG.

Fiat Chrysler Automobiles N.V is an Italian-American automaker and eighth largest auto maker and PSA Group is Europe’s second-largest car manufacturer. Will lead to create a global company with a current stock-market value of $47 Billion like Japan’s auto maker Honda Motor Co. However, both parties didn’t agreed on some of the details and no guarantee an agreement will be reached, the people said.

Further information reveal that PSA’s board is having meeting and company have discussed to putting PSA CEO Carlos Tavares in the same role at the merged company while John Elkann, scion of Fiat’s founding Agnelli family, would be chairman.

The discussion comes several month after FCA and PSA explore a partnership on pooling investment to build cars in Europe, and following unsuccessful negotiation between FCA and French rival Renault SA in June.FCA shares surged 7.6%, since April 2018.

The French government will play a major role in any deal because France is the biggest owner of PSA. Further analysts reveal that it would be far greater chance of success.

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