Another merger of equals? Fiat Chrysler-Peugeot tie-up comes with risks, rewards
, the former American automaker Chrysler Corp. has gallivanted around the world to find partners to assist. Both the French carmaker and Fiat Chrysler on Wednesday confirmed they are in talks that could to create the world's fourth-largest automaker with a roughly $50 billion valuation.
Boards for both Fiat Chrysler and PSA are reportedly in Europe on Wednesday to discuss the talks, however a successful deal is far from guaranteed.Challenges include consolidation, clashing corporate cultures and government and regulatory approval, among other issues. Such a deal, according to Murphy, also could alienate U.S. buyers, lowering the potential benefit of the two automakers combining.
Bernstein analyst Max Warburton said a merger between Fiat Chrysler and Peugeot "has more logic" than one with Renault. He specifically cites the potential for Tavares to create "long-term value." "This news is not unexpected, given that both companies have been actively exploring tie-ups with others to yield cost savings and other synergistic benefits," said David Leggett, automotive editor at data analytics firm GlobalData.
"These were not hallucinations of somebody looking to grandstand in the industry," Marchionne said at the time. "We have spent a lot of time trying to understand what makes this machine tick. And the machine can tick a lot better if certain things happened."
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