FCA, also known as Fiat-Chrysler, and PSA Group, which owns brands such as Citroen, Peugeot and Vauxhall, will merge operations to create ‘a world-class mobility company with global scale’.
In a tweet announcing the completion of the deal, FCA head of financial and corporate communications, Jeff Bennett said: “A New Day – Group PSA and FCA agree to merge. New entity will have the leadership, resources and scale to be at the forefront of a new era of sustainable mobility”.
We covered the emergence of the deal when it was announced, and more will come from a press conference later today. However, the headline points are as follows.
This merger will see the new entity become the fourth-largest global car manufacturer in terms of production volume, at 8.7 million units.
A major goal of the merger, so the companies say, is to be able to invest in ‘innovative mobility solutions and cutting-edge technologies in new energy vehicles, autonomous driving and connectivity’. Shared platforms and tech development will streamline costs for both.
A New Day – Groupe PSA and FCA agree to merge
New entity will have the leadership, resources and scale to be at the forefront of a new era of sustainable mobility –https://t.co/gGYH1HqzRo @fcagroup pic.twitter.com/MnUoDj9Zhm
— jeff bennett (@jeffbennettfca) December 18, 2019
The company’s portfolio will be well and truly universal, covering the globe across all market segments. Peugeot, Citroen, DS, Vauxhall and Opel will be stablemates with Alfa Romeo, Maserati and Ferrari, as well as Fiat, Jeep, Dodge and Chrysler.
FCA’s passenger car offerings will be shored up with new investment, while PSA will be perfectly poised for its re-entrance into America. In theory, the merger will assist both parties where they’re weakest, helping them achieve their respective goals as well as face new challenges in a rapidly evolving motor industry.
It will be the third largest global OEM in terms of revenue, with a combined figure nearing £144.5 billion.
An expected £3.2 billion in savings should come from run-rate synergies and technology sharing.
The savings will NOT come from any plant closures on either side of the deal.
The new group will have ‘much greater geographic balance’, with its revenues now spread across the globe – 46 percent in Europe, and 43 percent in North America (2018 figures).
PSA boss Carlos Tavares will lead the new company, while John Elkann (FCA Chairman) will chair.
This merger isn’t unprecedented for the two groups – or, more specifically, some of the marques within them. The outgoing Fiat Punto for instance, shared a platform with previous generations of Vauxhall Corsa.
It will also be a reunion for Citroen and Maserati. The French company owned the Italian brand between 1968 and 1975. Citroen borrowed Maserati engines for its exotic SM.