Wednesday, February 28, 2024
News The FCA and PSA Merger Is Official

The FCA and PSA Merger Is Official

Officially official, FCA and PSA have become equal partners and have formed a new car company.

  • The new company will be the 4th largest global OEM by volume.
  • It will also be the 3rd largest by revenue.
  • No plant closures are expected.

When talks of a potential merger between FCA and PSA (Fiat Chrysler Automobiles N.V. and Peugeot S.A.) started a few months ago, most agreed that the pairing seemed ideal as both required what the other had to offer. In short, FCA needed a stronger foothold in Europe along with electrified technologies while PSA will benefit from FCA’s positioning in the Americas.

What’s encouraging, at least for the moment, is that there will be no massive layoffs or plant closures. In a press release shared by FCA Canada, FCA and PSA bosses had this to say about the Merger:

Carlos Tavares, Chairman of the Managing Board of Groupe PSA, said: “Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology and services. I have every confidence that with their immense talent and their collaborative mindset, our teams will succeed in delivering maximized performance with vigor and enthusiasm.”

Mike Manley, Chief Executive Officer of FCA, added: “This is a union of two companies with incredible brands and a skilled and dedicated workforce. Both have faced the toughest of times and have emerged as agile, smart, formidable competitors. Our people share a common trait – they see challenges as opportunities to be embraced and the path to making us better at what we do.”

There are countless details to this merger of equals so here are the highlights as outlined by the press release:

  • Combines companies’ extensive and growing capabilities to address the challenge of shaping the new era of sustainable mobility
  • Combined company will be the 4th largest global OEM by volume and 3rd largest by revenue with annual sales of 8.7 million units and combined revenues of nearly €170 billion
  • Creates a diversified business with among the highest margins in its core markets of Europe, North America and Latin America and the opportunity to reshape the strategy in other regions
  • Merger will deliver approximately €3.7 billion estimated annual run-rate synergies with no plant closures resulting from the transaction – synergies are expected to be net cash flow positive from year 1
  • Strong combined balance sheet and high level of liquidity provide financial flexibility with an investment grade credit rating expected
  • Combined company will leverage investment efficiency across a larger scale to develop innovative mobility solutions and cutting edge technologies in new energy vehicles, autonomous driving and connectivity
  • Broad portfolio of well-established iconic brands offering best-in-class products covering key vehicle market segments and delivering higher customer satisfaction
  • Excellent working relationship between the two management teams, which share successful track records in turnarounds, value creation and successful OEM combinations
  • Strong governance structure to underpin combined company performance with John Elkann as Group Chairman and Carlos Tavares as Group CEO, with a majority of independent directors
  • Strong support of long-term shareholders (EXOR N.V., Peugeot Family Group, Bpifrance) who will be represented on the Board

Source: FCA

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Matt St-Pierre
Trained as an Automotive Technician, Matt has two decades of automotive journalism under his belt. He’s done TV, radio, print and this thing called the internet. He’s an avid collector of many 4-wheeled things, all of them under 1,500 kg, holds a recently expired racing license and is a father of two. Life is beautiful. Send Matt an emai

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