Fiat Chrysler and Peugeot owner PSA plan a 50-50 share swap to create the world’s fourth-largest automaker
) plan to join forces in a 50-50 share merger to create the world’s fourth-largest automaker, seeking scale to cope with costly new technologies and slowing global demand.
However, the PSA-FCA deal could still face close regulatory scrutiny, while governments in Rome, Paris and unions are all likely to be wary about potential job losses from a combined workforce of around 400,000. They aim to make 3.7 billion euros of savings without plant closures, and achieve around 80% within four years, at a one-off cost of 2.8 billion euros.
“It gives us critical size to face the dual challenges of autonomous vehicles and electric cars,” Le Maire told reporters.Paris, which has a 12% stake in PSA, was blamed for the collapse of the FCA-Renault talks by urging Renault to focus on its existing alliance with Japan’s Nissan. The French government also owns 15% of Renault.
The former Renault executive has emerged as one of the leading figures in the auto industry following the death last year of FCA’s former CEO Sergio Marchionne and the arrest of former Renault-Nissan boss Carlos Ghosn. Citi analysts said the cash payout for FCA shareholders contrasted with the Faurecia shares, worth about 2.7 billion euros at Wednesday’s close, being offered to PSA shareholders, saying the latter were “being asked to remain patient.”
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