December 18, 2019

CHANGE: Fiat Chrysler Agrees Binding Merger With Peugeot Maker to Create $50 Billion Auto Giant.

The two companies said Wednesday they had signed a combination agreement fixing the financial terms of the deal and the corporate governance structure of the combined group. The move marks an important step in solidifying a merger that was announced in October. The tie-up aims to create a $50 billion auto giant that would rank among the world’s largest car companies by sales.

The deal comes at a time of mounting cost pressures in the global car business, with auto companies investing billions in new technologies, such as electric cars, as demand for cars and trucks in the top auto markets weakens.

Among the terms added over the past several weeks were agreements that China’s state-run Dongfeng Motor Group Co. would sell part of its 12.2% stake in PSA back to the French car maker and that Fiat Chrysler would spin off its Comau division after the deal.

The Wall Street Journal on Tuesday reported that both companies’ boards had backed the agreement and the new deal terms that were added in recent weeks.

The transaction—expected to close in the next 12 to 15 months—will create a car maker selling 8.7 million vehicles a year with revenues of nearly €170 billion ($189 billion), the companies said. The merger won’t result in any plant closures and will lead to annual cost savings of some €3.7 billion euros a year, they added. The merged company’s name is so far undecided.

I wonder if this means they’ll try bringing Peugeot models back to the US again — maybe rebadged as Chryslers, since their line-up consists of one aged sedan and a minivan.

InstaPundit is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.