Peugeot/Citroën/Opel and Fiat/Chrysler have agreed to merge
The French and Italian-American companies’ boards have agreed to merge, starting a process that will likely take over a year even after shareholders vote. As part of the “50/50” deal, the Peugeot family may buy more shares, and Dongfeng will turn in a good portion of theirs, to keep ownership balanced. The current major shareholders will face a multi-year freeze on buying more stock.
The new company’s name hasn’t been released, and FCA news site Allpar has been speculating on what the possible names might be. PSA is essentially an acronym for P Company (P for Peugeot), while FCA stands for Fiat Chrysler Automobiles, representing the names of the two companies which merged a few years ago. Regardless, the new company will be officially based in the Netherlands, though little business is likely to be done there. Stock will be traded in each of the three major headquarters’ countries.
FCA is likely to drop their small and compact/midsize platforms in favor of Peugeot’s, which are newer; sales are nearly evenly split at the moment between Europe and North America, with the rest of the world accounting for around a tenth of the combined company’s overall sales. Even in Europe, Peugeot and Fiat don’t directly compete as much as one would think.
PSA stock will be worth 1.742 shares of the new company, and FCA stock will trade evenly, share for share. The board will be evenly split. The chair of the board is coming from FCA, while the CEO is coming from Peugeot.
Clark Westfield grew up fixing up and driving past-their-prime American cars, including various GM and Mopar V8s. He has ghostwritten auto news for the last few years, lives in Farmingdale, New York, and can be reached at +1.516-531-4021.