FCA, PSA preparing formal merger pact for next week

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Thread: FCA, PSA preparing formal merger pact for next week

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    GMI Staff Member Premium Member nadepalma's Avatar
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    FCA, PSA preparing formal merger pact for next week

    FCA, PSA preparing formal merger pact for next week, report says
    December 12, 2019
    Bloomberg via autonews.com

    Fiat Chrysler Automobiles and Peugeot maker PSA Group are aiming to sign a formal agreement next week to combine into the world's fourth-biggest automaker, according to people familiar with the matter.

    Progress is being made on the memorandum of understanding even though some outstanding issues still have to be resolved, said the people who asked not to be named because the information isn’t public.

    Reuters reported that PSA has called a called meeting of its supervisory board for Tuesday.

    Ways to assess potential FCA liabilities that have come to light since a broad outline of the accord was unveiled Oct. 31 are still under discussion, they said, adding that more than 100 managers are participating.

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    Re: FCA, PSA preparing formal merger pact for next week

    No solid news yet, but they're still moving forward. It will be interesting to see how GM's lawsuit against FCA, as well as Italy's own legal inquiry into how Fiat may have undervalued the assets of former Chrysler Group, may affect the final bargain. I don't honestly think it will stop any merger, but in looking at any long-term liabilities and value, it very well may affect the final ownership structure. I could imagine a scenario in which the final percentages that each entity has over the ultimate company being skewed by such liabilities. For example, Exor/the Agnelli family ends up with a smaller stake in the new business -- which could derail John Elkann's Chairmanship. Or perhaps the final company won't be a 50-50 split, but valued as a 55-PSA/45-FCA entity.
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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by nadepalma View Post
    Ways to assess potential FCA liabilities that have come to light since a broad outline of the accord was unveiled Oct. 31 are still under discussion, they said, adding that more than 100 managers are participating.
    ...while wondering which 50 will be fired first.
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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by nadepalma View Post
    No solid news yet, but they're still moving forward. It will be interesting to see how GM's lawsuit against FCA, as well as Italy's own legal inquiry into how Fiat may have undervalued the assets of former Chrysler Group, may affect the final bargain. I don't honestly think it will stop any merger, but in looking at any long-term liabilities and value, it very well may affect the final ownership structure. I could imagine a scenario in which the final percentages that each entity has over the ultimate company being skewed by such liabilities. For example, Exor/the Agnelli family ends up with a smaller stake in the new business -- which could derail John Elkann's Chairmanship. Or perhaps the final company won't be a 50-50 split, but valued as a 55-PSA/45-FCA entity.
    There will be no merger if the new company is not rulled by Agnelli family. Ellkann had implied in front of Wall Street that Exor will rule the new company in a similar fashion how they rule Ferrari. So most likely they will rule with the help of Peugeot family. Dongfeng and BPI may become irrelevant.

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    Re: FCA, PSA preparing formal merger pact for next week

    Man, How many times will Chrysler go through these 'mergers' only to be milked and dumped over and over again

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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by mbukukanyau View Post
    Man, How many times will Chrysler go through these 'mergers' only to be milked and dumped over and over again
    Though I was no fan of Marchionne and Fiat, at least they didn't steal all of Chrysler's money and leave them with garbage product like Mercedes did.

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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by BlackGTP View Post
    Though I was no fan of Marchionne and Fiat, at least they didn't steal all of Chryslers money and leave them with garbage product like Mercedes did.
    I hate Daimler to this day for that snake move.
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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by mbukukanyau View Post
    Man, How many times will Chrysler go through these 'mergers' only to be milked and dumped over and over again
    Quote Originally Posted by BlackGTP View Post
    Though I was no fan of Marchionne and Fiat, at least they didn't steal all of Chryslers money and leave them with garbage product like Mercedes did.
    True. I just wish that if they can't seem to be able to handle going it alone, that they would at least have a decent merger partner and not end up getting the short end of the stick always.

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    Re: FCA, PSA preparing formal merger pact for next week

    But, who is really left that would fit? Ideally, someone strong in cars. electric tech, and maybe stronger in Europe than FIAT is. That's the Chrysler wish list. PSA checks all those boxes.

    This idea of merging with GM that supposedly is driving the lawsuit would be terrible for both. They have way too much overlap. By the time you trim the huge overlap, you have little gained. The GM lawsuit is obvious BS, attempting to slow their inevitable loss of global market share. Mary could have taken action at many points along the way, but instead retreated from Europe, Australia, Russia. Mary's got a better position in China - for now. The rules are changing, though, and watch this flop in a most epic manner. Just wait. So many opportunities completely wasted.

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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by Chassis Guy View Post
    But, who is really left that would fit? Ideally, someone strong in cars. electric tech, and maybe stronger in Europe than FIAT is. That's the Chrysler wish list. PSA checks all those boxes.

    This idea of merging with GM that supposedly is driving the lawsuit would be terrible for both. They have way too much overlap. By the time you trim the huge overlap, you have little gained. The GM lawsuit is obvious BS, attempting to slow their inevitable loss of global market share. Mary could have taken action at many points along the way, but instead retreated from Europe, Australia, Russia. Mary's got a better position in China - for now. The rules are changing, though, and watch this flop in a most epic manner. Just wait. So many opportunities completely wasted.
    If you read the FBi indictment of UAW and FCA officials, you would not be too sure that GM's lawsuit has no merit. The courts will let us know though.

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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by 1958carnut View Post
    True. I just wish that if they can't seem to be able to handle going it alone, that they would at least have a decent merger partner and not end up getting the short end of the stick always.
    Typically, if somewhat sadly however, the party in financial trouble, (or even the one that's just spread too thin for comfort) doesn't get to set the terms of the merger. The party with the stronger hand sets the terms. What you'll endure to get the deal done is a function of how badly your organization needs (or desires) the merger.
    Last edited by bmwboy2007; 12-15-2019 at 04:51 PM.

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    Re: FCA, PSA preparing formal merger pact for next week

    I guess we have to play to Drudge Report. I saw this links from a post on Allpar forums. https://www.allpar.com/forums/thread...ost-1085154115
    https://www.fcagroup.com/en-US/inves...s/default.aspx
    https://www.reuters.com/article/us-f...-idUSKBN1YK27D
    MILAN (Reuters) - The boards of French carmaker PSA (PEUP.PA), the owner of Peugeot, and Fiat Chrysler (FCHA.MI) (FCA) in separate meetings on Tuesday approved a binding agreement for a $50 billion merger, sources said.

    The two mid-sized carmakers announced plans six weeks ago for a tie-up to create the world’s No. 4 carmaker and reshape the global industry. A merger is seen helping them deal with big challenges in the industry, including a global downturn in demand and the need to develop costly cleaner cars to meet looming anti-pollution rules.

    Both companies declined to comment.

    A source close to FCA had said earlier the two companies could formally announce the agreement early on Wednesday, followed by a conference call to explain further details later in the day.

    China’s Dongfeng Motor Group Co Ltd (0489.HK), which now has a 12.2% equity stake in PSA, will have a reduced stake of around 4.5% in the merged group, two sources said, in a move that could help make regulatory approval easier.

    According to the deal approved by PSA’s board on Tuesday, FCA’s robot unit, Comau, will remain within the combined group rather than be spun off as was originally planned in October, the sources said.

    The new group will evaluate how to extract value from Comau.

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    Re: FCA, PSA preparing formal merger pact for next week

    Statement expected tomorrow morning (euro time) from what I read.

    Having picked up Opel already, I would guess that PSA knows about what to expect from GM's assessment of these things.

    We'll see, but it looks like a Hail Mary (pun fully intended) to most objective observers...

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    Re: FCA, PSA preparing formal merger pact for next week

    An Allpar user shared that article.
    https://carbuzz.com/news/peugeot-is-...-about-america
    Peugeot Is Having Second Thoughts About America
    YESTERDAY BY IAN WRIGHT INDUSTRY NEWS / 12 COMMENTS
    But we'll see some of the European automaker's platforms.

    Peugeot hasn't been seen in the US market since it left in 1991, but the PSA Group has been working towards a triumphant return. It planned to return to the American market by 2026 with a car-sharing service before going on to sell its vehicles here.

    However, the merger between FCA and PSA is looking like it would make little sense for Peugeot to make a comeback. It would take time and money convincing the collective American conscious to accept the brand again, as well as install a dealer network.

    The merger means that FCA and PSA as a whole can cover both markets comfortably with shared platforms. Specifically, Auto News Europe reports that FCA is planning to use PSA's CMP platform for small vehicles and its EMP2 platforms for mid-size vehicles, while most Jeep models will remain on existing FCA underpinnings.

    The PSA platforms are also built to accommodate gasoline, diesel, or electrified drivetrains, so they will be remarkably versatile as the industry evolves to customer demands. Running those platforms will reduce development costs across the two continents. Reportedly, the CMP architecture could first be seen in the US as a small crossover for Alfa Romeo in 2022.

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    Re: FCA, PSA preparing formal merger pact for next week

    Quote Originally Posted by Stéphane Dumas View Post
    Peugeot was always a bit player in US-American markets. I remember seeing a few of the local iconoclasts piddling around in Poojiz, but the splash never happened.
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