The management of the two companies is currently considering various scenarios for merging assets, but no one can give a hundred percent guarantee that the negotiations will end with the signing of a final agreement.
Back in the spring of this year, the Peugeot family, one of the top three shareholders of the PSA group, announced its readiness to support an alliance with Fiat Chrysler Automobiles or a full takeover of the latter. Such a deal would strengthen the group's presence in the North American market — primarily through the Jeep and RAM brands, and given the plans for Peugeot's return to the US, it would open access to a wide dealer and service network. For FCA, such a partnership would mean a reduction in financial burden: the costs of developing electric powertrains would be shared between the two parties.
As WSJ reports, PSA and the Exor holding, which owns 29 percent of FCA's shares, will hold extraordinary board meetings today. The main item on the agenda, apparently, will be the discussion of potential merger schemes and the assessment of related risks. For example, in the United States, such a deal may be of interest to the Committee on Foreign Investment. This agency closely monitors transactions involving Chinese capital, and 12.2 percent of Peugeot's shares are controlled by Dongfeng Motor Group.
If agreements are reached, the combined PSA-FCA structure would become the world's largest automaker with a market capitalization of about 50 billion dollars and annual sales of approximately nine million cars.
Fiat Chrysler Automobiles is under pressure due to stricter environmental regulations and is generally going through a difficult period, so it is looking for new partners. One possible option was Renault: at the end of May, FCA proposed to the French company to discuss a merger on equal terms. According to insiders, Nissan opposed such integration — given the arrest of Carlos Ghosn and the general tension, this could have exacerbated disagreements between the management of Renault and Nissan — as a result, FCA withdrew its proposal.
