Recent speculation of a potential merger, partnership, or alliance between France’s PSA Group and Fiat Chrysler might be pointless, as the offer has already occured, a report in the Wall Street Journal suggests.
Sources familiar with the matter claim PSA approached the Italian-American auto giant earlier this year in the interest of merging the two companies. Apparently, it wasn’t the first time PSA called up FCA for a hookup. The answer was the same.
The energized PSA Group, fresh from taking Opel and Vauxhall off General Motors’ hands, has made clear its desire to expand its global footprint. At the recent Geneva Auto Show, PSA CEO Carlos Tavares was looking to swipe right on any major automaker that could help open new doors for the French company — especially in the West.
A merger would certainly help PSA’s plan to return the Peugeot brand to the North American market by the middle of the next decade. FCA, it seems, will not be that dance partner.
According to WSJ, talks have since ceased between the two automakers.
FCA brass reportedly didn’t like the fact that a merger would increase PSA’s access to Europe’s “mature” market. Meanwhile, the Agnelli family — which holds a controlling stake in FCA — didn’t like the idea of a takeover financed with PSA stock. So close on the heels of the Opel acquisition, the French automaker would likely require the use of equity to complete the transaction in the interest of keeping debt levels low.
Still, FCA CEO Mike Manley maintains that he remains open to any tie-up that would make his company stronger.
[Image: Fiat Chrysler Automobiles]
Always a lot of talk about how size can allow cost savings.
But it often just adds bureaucracy and a lot of executive wheelspin.
Peugeot could be as huge here as Alfa Romero.
I had a neighbor with a Peugeot. He made the newspaper when it conked out and several people helped push it to a nearby gas station. A newspaper photographer happened to see it, and made sure to include in the photo my neighbor’s bumper sticker: “Friends Don’t Let Friends Drive Peugeots”.
I wonder what word I used triggered the “your comment is awaiting moderation”? Could moderators here give us a list? It would save them a lot of work.
Probably Peugeot? I do not see other offending words.
Alfa Romero is too expensive for what it worth. PSA will be like Buick I guess.
The merger would at least have the benefit of collecting all the bottom-rung automakers in one place.
That’s been the standard Chrysler practice for decades, so I don’t understand why they didn’t jump at the chance, LOL.
You might think if Sergio were still alive, FCA would have jumped at the merger. But he WAS alive the first time it was proposed, so that can’t be it. I’d guess the Agnelli heirs see a booming market for Ram and Jeep, and plan to stick with FCA alone.
I agree,and support all FCA Brands.
If you put enough “bottom rung” automakers together do you get one decent one?
“The merger would at least have the benefit of collecting all the bottom-rung automakers in one place”
I would call it “European GM” or graveyard of brands.
Anybody know how former GM Europe sales have been since PSA grabbed Opel and Vauxhall?
http://carsalesbase.com/european-car-sales-data/opel-vauxhall/
Down about 5%. But the market hasn’t been great for anyone since the new MLTP procedures went into effect. What is different is that PSA is making money, having somewhat cleaned up the operation. Reported right here on TTAC last week, I think.
Maybe FCA needs to specify who they have the urge to merge with because they have been begging for a partner for a few years now.
GM would be perfect. GM no European presence. PSA no North American or Chinese presence. Tavares and Barra would have to work together and I’m not real sure two Alpha’s like them could do it. But geographically it’s perfect.
unless theyre swapping stock and theres no debt involved its not worth it.
The debt might be the key. Sergio Marchionne plowed lots of Ram/Jeep profits into reducing debt. Now the profits are available for new product and dividends, and net revenue (not net profits) is up from $68B in 2016 to $95B last year. Why siphon that off to prop up PSA?
I had no idea PSA needed propping up. Pray tell.
Totally agree. I think PSA needs FCA more then FCA needs RSAA. FCA has 2 brands in F1 PSA ZERO.
I am happy FCA refused Peugeot’s advances. I love FCA,and would, and do buy their brands. I am sure they can make it all on their own with a little better management and product availability. I think they have the potential to do well,and I will always support FCA. I am not a Peugeot fan. Honda,Mitsubishi and Subaru,are small companies,and FCA outsells all 3 of them ,so why can’t they do it alone. If FCA does merge,I would love it to be either Subaru or Mitsubishi.
It crossed my mind that, as FCA is enjoying considerable success, the time when someone could grab Jeep on the cheap has passed.
If I was Mike Manley, I might consider taking a page from PSA’s book and going shopping for “troubled assets” myself.
Ford is clearly bleeding out in South America. Besides abandoning heavy trucks, they are abandoning both the Fiesta and Focus in those markets, leaving only the Ecosport, Ka and Ranger produced on the continent.
Last summer Ford was reportedly shopping their South American operations to both VW and FCA.
Meanwhile Barra is “exploring alternatives” for GMs loss making South American operation.
In South America as a whole, market share by OEM.
Renault-Nissan 18%
GM 15%
VW 13%
FCA 11%
Hyundai-Kia 9.7%
Toyota 9%
Ford 7.9%
Honda 4.4%
PSA 3.7%
Mazda 1.7%
I see a couple candidates with deep pockets from other parts of the world that could beef up their South American presence by picking up GM and Ford “distressed assets” on the cheap.