FCA ink deal with PSA Groupe

The merger is valued at close to USD 50 billion

FRENCH-BASED PSA GROUPE and Italian-American corporation, Fiat Chrysler Automobiles have inked a merger deal that is set to make them the world’s fourth largest automaker and puts them just behind the Volkswagen Group, Toyota Group and the RenaultNissan alliance. Globally, PSA Groupe owns Peugeot, Citroen, DS and Vauxhall-Opel brands while the FCA’s subsidiaries include Fiat, Chrysler, Dodge, Jeep, Ram, Maserati, Abarth and Alfa Romeo.

This merger has taken place in a time when there is a global sales slowdown due to trade wars taking place, and a shift towards cleaner emissions has resulted in automotive manufacturers looking to form strategic alliances or mergers to bring down research & development costs.

This merger between PSA and FCA is valued at almost USD 50 billion as per a Bloomberg report. FCA Investors will be rewarded with a dividend of EUR 5.5 billion while PSA will hand over its stake in the French automotive supplier Faurecia SE that is worth about EUR 3 billion to its shareholders. The new headquarters for the combined group will be based out of the Netherlands and its board will have 11 members from PSA, including CEO Carlos Tavares. FCA Chairman John Elkann too would be engaged in a leading role. As for India , FCA has its presence here with the Jeep brand and PSA will make its debut with the Citroen brand launch coming up this month. Citroen will be bringing in the C5 Aircross in the second half of 2020. How this merger will pan out for the plans of the two brands in India is yet to be seen.