Official: FCA And PSA Agree To Merge, Create The World’s Fourth Largest OEM

As expected, Fiat Chrysler Automobiles and PSA Group have announced their agreement on combining their respective businesses and, thus, creating the fourth largest OEM in the global automotive industry in terms of global sales.

In a joint statement, the two automakers said they will join forces in a 50/50 merger, with both boards having given the mandate to finalize the discussions in the coming weeks.

The new FCA-PSA unit is expected to achieve around $4.13 billion (3.7 billion euros) in annual run-rate synergies and have a combined market value of around $50 billion, based on current stock prices. The two companies estimate that 80 percent of the synergies would be achieved after four years. Shareholders of each company will own 50 percent of the combined unit .

The Board will be comprised of 11 members, with five of them nominated by FCA, with John Elkann as Chairman, and five nominated by the PSA Group, including the Senior Independent Director and the Vice Chairman. Carlos Tavares will assume the position of Chief Executive Officer for an initial term of five years.

Related: PSA Board Green Lights Negotiations For Merger With FCA

“This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity,” said Carlos Tavares, PSA Group’s CEO. “I’m pleased with the work already done with Mike and will be very happy to work with him to build a great company together.”

“I’m delighted by the opportunity to work with Carlos and his team on this potentially industry-changing combination,” added Mike Manley, FCA’s CEO. “We have a long history of successful cooperation with Groupe PSA and I am convinced that together with our great people we can create a world class global mobility company.”

FCA investors are expected to receive a dividend of $6.1 billion (5.5 billion euros), while PSA will distribute its 46 percent stake in auto parts supplier Faurecia to its shareholders. The new corporate entity will have its headquarters in the Netherlands, with head-office locations in France, Italy and the US.

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  • OdysseyTag

    Well…. That was quick

    • Przemix

      Moving Opel to PSA was also quick, maybe a week from first rumor

  • Lloyd Anthony D Peters

    Sweet. British Leyland is back!! ?

  • ThatGuy

    Epic new, lets hope its a good future

  • Dude

    This is like when your friends announces they’re marrying someone they meet like a month ago. Hopefully the relationship goes well

    • Cevair Zufer

      Well people meeting for years don’t go well.

    • Romain AA

      As said in the article, FCA and PSA have collaborated in many different fields for many years, so it’s not like they just met. Yet, I agree with you, the road to making this a success is still a very long one..

  • Frase

    Err, does this mean Peugeot’s North American return isn’t happening? I mean, since they’ve technically got Jeep, Dodge and Chrysler there, is there much point? I suppose sending Pugs over there would be fulfilling different roles to those three, but I do wonder if they think it’s a venture not worth pursuing.

    Either way, a really interesting development. Hopefully this means the end of FCA’s minimalist effort in updating their range.

    • Giannis Antypas

      On the contrary,I believe now it is more possible than ever before for the comeback of Peugeot to the US. I assume this one weighed heavily on the PSA side in making this deal with FCA.

      • lagann

        Problem with Peugeot in the US is no one can pronounce the name correctly lol.

        • Marc Gruben

          We had a couple of 604’s when I was a teenager (1977 & 1979) and it was hilarious to hear Americans trying to pronounce the name properly. “What izzat? A Poo-Jew-It? Pee-quat? Pyoo-gee-ott?” Sometimes they’d get close enough with “Poo-Joe” that I didn’t feel the need to correct them.

          Regardless, it was fun driving a unique car that nobody was familiar with. There was nothing quite like the ride of a big Pug. I could have done without the twin Solex carbs, though. I hated those damned things.

        • boo boo the fool

          people can’t pronounce Hyundai yet they’re selling like hot cakes now

    • exeptor

      They will use the Chrysler sellers network I believe. Plus this merge is still at a very early stage and Chrysler cars based on PSA platforms might be expected no early than 2-3 years.

  • Giannis Antypas

    There are still many steps ahead for this merge to be accomplished.

    We will see how this will evolve, nothing is finished yet in this stage.

  • exeptor

    This is a huge event in car world – it happens once in a decade (on average) … if I recall correctly. If Bloodhound LSR mange to break the 1000 mph barrier this (maybe next … and the same applies for this merger) year will be a big one for petrol heads.

  • TheToadPrince.$€$

    good bye chrysler and dodge……

    • Six Thousand Times

      Probably but that was always going to happen, anyway. Eventually.

  • WalthamDan

    Now produce a Dodge 208 GTi Thank you.

    • Alduin

      Yes with a Fiat engine right? lol

  • Alexander Carabitses

    There is certainly a lot of potential here. But let’s get one thing straight, if the corporate cultures of PSA and FCA fails to mesh, this merger is Dead On Arrival. This article, which I’m sure is a synopsis of the press release, mentioned nothing about cultural synergies and if you remember, this is a big reason why DaimlerChrysler crashed and burned.

    On a side note, if PSA still brings Peugeot to the US, it will be the first time in a long time that FCA has had a true volume brand that’s equivalent to Honda and the like in its US portfolio.

    • Alduin

      Peugeot wont last like Fiat.

    • Andys

      Peugeot isnt equivalent to Honda. Even Fiat is better than Peugeot

      • designer_dick

        Peugeot was ranked the most reliable brand on sale in the UK this year by J.D. Power, with 77 problems per 100 cars, while Fiat was second last with 173 problems per 100 vehicles. Also, unlike Fiat, Peugeot offers a full line-up that stretches from city car to full-size, 7-seat family SUV.

        • MarketAndChurch

          He’s probably talking about US sales, where Honda absolutely crushes VW, FCA (apart from Jeep & Ram), and a great many other brands that do much better in Europe, such as Volvo and Hyundai.

      • MarketAndChurch

        Better? Questionable. But in terms of volume? Yes. Fiat is missing quality midsize and large SUV’s and wagons and muscle cars. That is why its presence evaporated in the US, and also why Dodge has not seen any new products since it came under Fiat ownership. But now this partnership might help them (and Dodge) out in a few key areas, namely midsize SUV’s, and maybe even a muscle car type vehicle, though a RWD platform still needs to be developed.

  • Karl

    But why do these European companies insist on merging with weak American carmakers Einstein?

  • Alduin

    Now FCA cars and PSA cars will be twice as unreliable as before! American designs with Mexican engines and French Italian drivetrains. built in Detroit via union slob labor. What could possibly go wrong?

  • stelvio

    All the crappy cars and money pits under one roof

    • Andys

      crappy comment

  • Andys

    Peugeot platforms are not german engineered, and I really hope we dont get german engineered crap to FCA cars.

  • kachuks

    The burning question is how do you combine FCA and PSA into a new name?

    Jokinhg aside, some DS designs would turn heads here in the U.S.

  • designer_dick

    The combined company will have at its disposal:

    1. Peugeot
    2. Citroen
    3. DS
    4. Opel
    5. Vauxhall
    6. Fiat
    7. Alfa Romeo
    8. Lancia
    9. Maserati
    10. Chrysler
    11. Dodge
    12. Jeep
    13. RAM

    Which is simply too many brands to effectively manage. so some will probably have to go (most likely are perennial underperformers like Chrysler, Lancia and DS), along with some factory closures in the medium term. Vauxhall’s Ellesmere Port factory in the UK is almost undoubtedly a goner after 2021.

    • Robert Eller

      DS is just getting started and seems to be taking off in China. I can see Lancia being the first to go. Maybe Chrysler and DS will be paired together, like how it was supposed to happen with Lancia originally. I see Fiat being focused solely on the 500, much like Mini is with the Cooper. FCA desperately needs more product in the US.

      • designer_dick

        DS isn’t taking off in China or anywhere else. They moved fewer than 4,000 cars in China in 2018, and fewer than 50,000 in Europe. DS is PSA’s vanity project, much like Alfa Romeo is for FCA. As for Fiat, I don’t think it’ll be too long before the brand is withdrawn from the US and renews its focus on Europe and South America, where it’s always been far more successful.

      • Alduin

        DS? Like Dog ??

    • MarketAndChurch

      I would absolutely love the idea of Dodge merging with Opel and Chrysler maybe merging with Peugeot/Citroen. That would allow PSA to build Peugeot/Citroen products directly in the same assembly lines making Chrysler products, and Opel the same thing vis-a-vis Dodge assembly lines.

      It’ll give Peugeot/Citroen both a product presence in the US, as well as manufacturing presence in the US, give Dodge and Chrysler the product lineup they were never able to get from Fiat, and give the US market a combined 3 new automotive brands, 5 if include the all-new Dodge and Chrysler.

    • iea96

      I’m not taking sales volume into account, but in terms of market placement they should have a VW Group like approach, at least here in Europe. From lower to higher segment:

      Skoda: Fiat
      Seat: Citroen, Opel
      Volkswagen: Peugeot, Opel
      Audi: Alfa Romeo
      Porsche: Maserati

      Fiat should be their budget offering, there is no doubt about that. But I’m unsure about Peugeot, Citroen and Opel. Maybe one of them should just be turned into an electric only spin-off.
      DS should merge back into Citroen, so as RAM into Dodge.
      Jeep is Jeep and Lancia is already dead and will probably stay that way unless a miracle happens.
      I haven’t specified Vauxhall here since it’s only a rebadge.
      Since I don’t have as detailed knowledge about the market in the USA, I left Chrysler and Dodge out here.

  • FlameWater

    So are any nice cars coming to N.A, probably not

    • William rowe

      that white sedan in the second pic would make a nice dodge avenger sedan

  • Mr. EP9

    It’s official. So what should we call it, the PSA – FCA alliance?

    Peugeot – Fiat group?

    PSFCA?

    • Classic Bob

      PFC, kinda sounds like KFC. Lets hope they serve up something that’s finger licking good..

  • Emoto

    I would love to see some of the cars in the PSA universe re-badged as Chrysler or Dodge.

  • Enter Ranting

    Mercedes sucked Chrysler dry during their merger.

    • designer_dick

      Shhh. Don’t let facts get in the way of his rant. The idea that Mercedes-Benz ‘merged’ with Chrysler to plunder its cash reserves and palmed it off with outdated, second-hand platforms so it didn’t have to fund any real investment isn’t something he’ll want to hear about.

      • Enter Ranting

        I don’t really care about Chrysler, but the “merger of equals” was anything but. Mercedes plundered Chrysler. But the fact that Chrysler’s old car designs are still popular to this day says something about them. Chargers and Challengers are everywhere.

  • Сафиуллинь-Мухамед Рамазанов

    Looking forward for the naming
    PSA & FCA = !!!

    • Alduin

      PSA=Public Service Annoucement?

  • lagann

    That’s wishful thinking. Layoffs always occur during mergers.

  • Marc Gruben

    I don’t care how it gets here, but if Pug brings the 508 Estate over (with a stickshift) I’m an owner.

  • Mr. EP9

    You are hopelessly ignorant.

  • Marc Gruben

    If they bring over the 508 Estate – with a stickshift (I can dream) – I’m an owner. How can you not love this?

    https://uploads.disquscdn.com/images/1d2938ace5c91df24b85b25fd90d5edc60408caae897416716bf4906a2e2f9b8.jpg

    • William rowe

      no one will buy it, ask buick

      • Alduin

        It’s French of course nobody will buy it and too weird.

      • MarketAndChurch

        So sad, but true. It needs to be a raised wagon with trim to make it look off-road friendly on light trails.

    • Alduin

      It’s French…

    • MarketAndChurch
      • MarketAndChurch

        A little bit.

      • Marc Gruben

        The Pug has been on the market for almost a year and a half. That Kia, although probably accurate, is a rendering. So it’s more accurate to say the Kia will look like the Peugeot.

    • enthusia

      I had no idea there was an estate version of this. Thats very sleek, looks better than the sedan. Too bad there isn’t a demand for estate cars in the US

  • William rowe

    you Sir are making donald trump proud using his fact books of BS

  • Сафиуллинь-Мухамед Рамазанов

    13 brand need to be a real 6 or 7 brands let’s take ‘ em one by one

    1. Peugeot
    2. Citroen (re-merge with DS again)
    3. DS (re-merge with Citroen again)
    4. Opel
    5. Vauxhall (to be deleted and only be Opel)
    6. Fiat (re modelled as either upscale to mini competitor or downscale to Dacia competitor)
    7. Alfa Romeo (merge with Maserati forming a full tier 1 luxury lineup)
    8. Lancia (deleted)
    9. Maserati (merge with Alfa forming a full tier 1 luxury lineup)
    10. Chrysler (deleted)
    11. Dodge (re-merged with ram again)
    12. Jeep
    13. RAM (re-merged with Dodge again)

    • Alduin

      Liking that philosophy but still way too many brands. Mini is an awful brand to begin with so is Fiat. Removing Fiat is the only way since it’s a money loser. Chrysler should be revamped to take on Cadillac and Lincoln. Dodge and Ram should be together again. Separating Ram was dumb. Lancia and Maserati should also be killed. Vauxhall is pointless so remove them as well.

      Keep Opel and remove Citroen. Keep Alfa as a competitor lux automaker to european brands. Keep Chrysler but revamp the entire lineup as American lux. Dodge should still make Cars,Trucks and SUV’s as a competitor to Ford and Chevy.

      • RobPul

        Congratulations, by killing the (profitable) Fiat, Citroen and Vauxhall brands you just reduced by 3m (1/3 of the total) the combined FCA-PSA volumes, and almost wiped out the groups’ presence in Latin America, Italy and Britain. Not bad.

        • Alduin

          Garbage brands anyways.

      • designer_dick

        Vauxhall isn’t pointless. It accounts for 20% of Opel’s sales, and ensures them higher volume in the UK than they’d be able to achieve with the Opel brand (for reference, Vauxhall’s UK market share in 2018 was 7.68% vs Opel’s 5.9% on the continent) for little or no extra investment. There’s no duplication of effort in marketing, as Opel isn’t sold in the UK, and Vauxhall isn’t sold outside the UK. They’d also have to spend quite a bit of money to re-establish Opel in the UK, as it hasn’t had a presence here for decades.

    • MarketAndChurch

      I absolutely love this, but I think Chrysler and Dodge should be merged with Opel and PSA so that it would allow PSA and Opel the ability to build their cars on the same assembly lines making Chrysler/Dodge products. This would quicken their entry into the US and enable them to get around tariffs. Chrysler is only dead, like Dodge, because Fiat starved both of products and resources after their screw ups with the Dart and 200.

      Chrysler and Dodge can merge with PSA and Opel

      Chrysler can become an electric car brand like Tesla, allowing Chrysler a new identity, and giving both Peugeot and Citroen independent room to breath in the US market. Chrysler electric products would be based on PSA/Opel offerings, and co-developed electric platforms for the European market.

      Peugeot, the volume brand, can take on Honda, Toyota, Ford, Nissan, Chevy, and other volume mainstream brands.

      Citroen, the affordable value-luxury alt. to Peugeot can take on Hyundai, Kia, Mazda, Subaru, Mini, and outsell VW in the US. Or, both Peugeot and Citroen can play 2-halves of the same coin and have a Hyundai-Kia frenemy-type competitive relationship.

      Opel can keep their great engineering heritage and take on Tier 2 luxury brands such as Buick, Lexus, Lincoln, Acura, Volvo, Infiniti, and Cadillac. In other words, move upmarket, and unlike some of those other brands, provide superior engineered products as a more affordable alternative to BMW and Mercedes.

      Dodge+SRT can remain a niche brand focused on performance and cool gotta-have-it cars as well as trucks, while sharing some of those product offerings with Citroen and Peugeot. Competition includes, Ford, Chevy, Subaru, Kia, Toyota, etc, and being a value alternative, performance wise, to luxury brands.

      Jeep can stay Jeep and do Jeep things. Competitors include Toyota, GMC, Ford, Land Rover.

      Maserati/Alfa Romeo can merge and take on BMW, Mercedes, Audi, Porsche, Aston Martin. Maybe Alfa Romeo can represent extreme performance division within Maserati or its fine craftsmanship division, or maybe even Maserati’s flagship models can get the Alfa name.

      Maybe Fiat can re-enter the US as a cheap affordable low-cost option, providing solid offerings co-engineered with PSA/Opel. There’s a huge underappreciated market that is not being addressed as car prices continue to go through the roof.

    • Giannis Antypas

      Lancia is not to be deleted. It is a true luuxury brand, more so than the struggling Alfa romeo.

      • Ditzebächer

        Merge 1. Peugeot + 4. Opel + 5. Vauxhall + 10. Chrysler and position against VW, Skoda, Seat, Toyota, Hyundai, Nissan, Renault, … (same cars, slightly different designs, from small cars up to family van and small SUV)
        Merge 2. Citroen + 3. DS and position against Merc
        Make 6. Fiat the better Dacia
        Merge 7. Alfa Romeo + 8. Lancia and position against BMW, Audi, and maybe Jaguar (sporty luxury)
        Place Maserati against Porsche
        Merge 11. Dodge with 13. RAM and make pickups trucks and so for US market

        Keep 12. Jeep as the offroad legend against Land-Rover

        And for all, offer full electric version in all models asap where it makes sense. Autonomous is not an option for petrolheads.even if they drive fully electric.

        What PSA+FCA would need is an asian brand, Mazda for example…

        • Сафиуллинь-Мухамед Рамазанов

          Mazda , Subaru & Suzuki already in Toyota territory right now, Toyota just pumping the share slowly by time

      • Lancia is already dead. It was already dead when my mom drove her Lancia Phedra.

    • designer_dick

      Vauxhall’s Ellesmere Port factory might not be long for this world, but the brand name itself isn’t going anywhere, as putting a Vauxhall badge on a car is no more expensive than putting an Opel badge on it. They’d also have to spend quite a bit of money re-establishing the Opel brand in the UK, as it hasn’t been sold here for almost 40 years.

    • dufonrafal .

      More like:

      Peugeot
      Citroën
      DS
      Opel/Vauxhall
      Fiat
      Alfa Roméo
      Maserati
      Chrysler
      Jeep
      Dodge/RAM

      So 10 brands (VAG = 11 brands) with different markets (geographically)

    • RAM should have never left Dodge. They barely did a better job than trying to make SRT a brand.

      • Сафиуллинь-Мухамед Рамазанов

        Agree

  • I don’t know what to think about this. No clue if it’s good for either FCA, PSA or consummers. If you think so, tell me why.

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