FCA and PSA in Merger Talks

Fiat Chrysler Automobiles and PSA Group are engaged in intensive discussions that could lead to the announcement of a merger as soon as this week, according to Bloomberg. Executives from both factories confirmed the talks are ongoing.

The Italian-American FCA and France’s PSA, home of the Peugeot, Opel, Citroen, and Vauxhall marques, would combine to form a $49 billion company that would supplant General Motors as the world’s fourth largest automaker, trailing only Volkswagen, Toyota, and the Renault-Nissan-Mitsubishi alliance.

Fiat Chrysler nearly merged with Groupe Renault in June. FCA chairman John Elkann pulled a $35 billion offer — which would have created the world’s third biggest factory — at the 11th hour, citing indecision on the part of the French government, which owns 15% of Renault, and Nissan, Renault’s manufacturing partner.

The report’s authors said deals designed to pool resources among factories, including the shared investment by Ford and Volkswagen in electrification and autonomous driving technology announced this summer, were likely inspired by increased manufacturing costs and global economic uncertainty.

"Automakers face tremendous pressure to pool their resources for platform development, manufacturing and purchasing as they battle through trade wars, a global slowdown and an expensive shift toward electrification and autonomous driving," they wrote. "Producers face the additional burden in Europe of new rules on emissions."