Both Fiat Chrysler Automobiles (FCA) and Groupe PSA (colloquially known as Peugeot Group) have been on track to merge for the past year. However, there was one large hurdle the companies needed to clear, as European regulators scrutinized the $38 billion proposal. Now, though, Reuters reports the firms have gotten the regulatory green light to merge Monday. The deal will create the world’s fourth-largest automaker, called “Stellantis”.
The all-share merger will bring together some of North America’s most popular brands, as well as those with a major presence in Europe. From FCA’s side comes Chrysler, Dodge, Jeep, Ram, Fiat, Alfa Romeo and Maserati. The French auto conglomerate’s brands include the Peugeot, Citroën, Opel, Vauxhall and DS brands. The commingling will pool resources, technology and mind share from both brands, a move both sides hope will make Stellantis competitive as it vies for greater dominance in the automotive industry. Streamlining is also a major goal, though an annual $5 billion in cost cuts is supposed to happen without closing any global factories.
Antitrust concerns
To get the merger past regulators, FCA and PSA had to make concessions on where the merged company will focus its efforts. Per the Reuters report:
To allay EU antitrust concerns, PSA has offered to strengthen Japanese rival Toyota Motor Corp., with which it has a van joint venture, by ramping up production and selling it vans at close to cost price, people said. FCA and PSA will also allow their dealers in certain cities to repair rival brands.
Following feedback from rivals and customers, the carmakers only had to tweak the wording of their concessions, with no changes to the substance, the people said.
Foo Yun Chee and Giulio Piavaccari, Reuters
The companies said they aim to complete the merger in the first quarter of 2021.
Peugeot, Citroën in the U.S.?
Of course, with the Stellantis merger comes the question of whether the French brands Peugeot or Citroën will reenter the U.S. market. At this point, there’s no confirmation that will actually happen. The companies seem determined to focus on pooling resources will keeping their core brands in their respective markets.
Anything can happen, though, so we will have to wait and see how the merger plays out. Here’s the news from the original announcement below:
