MILAN: Fiat Chrysler and Peugeot owner aim to sign a final merger agreement as early as the beginning of next month.
The automakers said earlier this week they planned to join forces in a 50-50 merger to make the world’s fourth-largest automaker, seeking scale to cope with slowing global demand and costly new technologies.
The two automakers said they aimed to reach a binding deal on the $50 billion merger “in the coming month”.
Fiat Chrysler brings with it a strong footprint in North America, where it earns at least two-thirds of its profits, while Peugeot is the No. 2 automaker in European union.
Both automakers are at a struggle in China, however, despite the participation of Peugeot’s Chinese shareholder, Dongfeng, and are playing catching up in developing electric vehicles.
Fiat Chrysler shares are being traded up at 9% i.e. 14 euros in Milan, while Peugeot shares were down 3.2% to 22.84 euros.
The merger is predicted to offer savings of 3.7 billion euros ($4 billion), which the automakers expect to achieve without closure of any factories — a concern of unions in both Italy & France where the car makers have more overlap.
Fiat Chrysler’s strongest brands are Jeep SUVs and Ram trucks and it is focusing on relaunching its luxury brands, Maserati and Alfa Romeo, with a hybrid engines focus. Fiat Chrysler still makes smaller cars under the Fiat marquee, mostly for the Latin American and European and markets.
PSA Peugeot makes mostly small, city-friendly cars, family sedans and SUVs under the nameplates of Peugeot, Citroen and Germany-based Opel.
The two groups were at work to finalize all the merger details and they hoped to sign a binding MoU in “three-four weeks”.
“Which means the final agreement should be signed by early December, or by Christmas at the latest,”.