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Fiat Chrysler and Peugeot strike deal to become world’s 3rd largest selling automaker

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FCA and PSA Groupe deal could bring Peugeot back to Canada and U.S.

After the initial announcement in October 31,  FCA and PSA Groupe (Peugeot-Citroen), have officially signed the 50:50 merger deal, which effectively creates the world’s fourth-largest global automotive manufacturer by volume, behind Volkswagen, Toyota and the Renault-Nissan alliance, and 3rd largest by revenue according to today’s FCA press release.

The new manufacturer’s projected revenues based on 8.7 million vehicle sales will be nearly $190 billion U.S. (€170 billion) per year with a recurring operating profit of over $12.2 billion U.S.(€11 billion) and an operating profit margin of 6.6 percent. All these numbers are calculated based on a simple aggregated basis of 2018 results. 

The combined entity will have a balanced and profitable global presence covering all key vehicle segments from luxury, premium, and mainstream passenger cars through to SUVs and trucks & light commercial vehicles.

And the biggest benefit for Fiat Chrysler is they get access to Peugeot’s more modern vehicle platforms including electric and hybrids, helping it to meet tough new emissions rules, while PSA would benefit from FCA’s profitable U.S. business featuring brands such as Ram and Jeep.

Carlos Tavares, Chairman of the Managing Board of Groupe PSA, said: “Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology and services. I have every confidence that with their immense talent and their collaborative mindset, our teams will succeed in delivering maximised performance with vigour and enthusiasm.”

Mike Manley, Chief Executive Officer of FCA, added: “This is a union of two companies with incredible brands and a skilled and dedicated workforce. Both have faced the toughest of times and have emerged as agile, smart, formidable competitors. Our people share a common trait – they see challenges as opportunities to be embraced and the path to making us better at what we do.”

This merger combines FCA’s strength in North America and Latin America and Groupe PSA’s solid position in Europe. The new Group will have a greater geographic balance with 46% of revenues derived from Europe and 43% from North America, based on aggregated 2018 figures of each company. The combination will bring the opportunity for the new company to reshape the strategy in other regions.

Completion of the proposed combination is expected to take place in 12-15 months, subject to customary closing conditions, including approval by both companies’ shareholders at their respective Extraordinary General Meetings and the satisfaction of antitrust and other regulatory requirements.

Peugeot has long had its sights on reintroduction into the North American market, and after this merger their new models may be returning to roads in the United States and possibly Canada for the first time since the company pulled out in 1991.

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