Fiat Chrysler and Peugeot boards accept the auto merger

The board of directors of the French and Italian car manufacturers Fiat Chrysler and Peugeot have accepted the auto merger as equals. This statement from the companies confirms the earlier media writing this week. The shareholders of each company would own 50% of the equity of the newly combined group.

According to the companies, this new combination will create the 4th largest global auto company with 8,7 million vehicles annually. The strength areas would be the FC´s in the North America and Latin America and Peugeot PSA´s strength in Europe. The brand areas would include luxury, premium, mainstream, passenger car, SUVs and Trucks.

-The merged entity would bring together the companies’ extensive and growing capabilities in the technologies shaping the new era of sustainable mobility, including electrified powertrain, autonomous driving and digital connectivity, the companies say in the press release.

The Fiat Chrysler and Peugeot estimate that the annual run-rate synergies would be 3,7 billion euros without any plant closures resulting from the transaction. According to the release, it is argued that 80% of the synergies would be achieved after 4 years.

-The total one-timecost of achieving the synergies is estimated at €2.8 billion, Fiat Chrysler and Peugeot say.

The new company would have Dutch parent company, with Dutch governing rules, and the Board would include a majority of independent Directors. John Elkann would be the Chairman of the Board and Carlos Tavares would be as CEO, but also a member of the board.

It is expected that the companies form the Memorandum of Understanding in the coming weeks.

– Both share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to capture successfully the opportunities and manage effectively the challenges of the new era in mobility, the companies underline the benefits of the merger.

The new car company would have annual revenues, combined of nearly 170 billion euros and operating profit over 11 billion euros.

 

 

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Fiat Chrysler and Peugeot PSA agree to merge – WSJ

The auto industry is having its golden years regarding changes. Now the Italian car manufacturer Fiat Chrysler (FCHA) is said to merge with the French Peugeot owner PSA (UG). The companies are expected to publish the details on Thursday the Wall Street Journal reported siting sources.

Peugeot-508-SW-HybridThis 46 billion dollars merge would create the world fourth largest car manufacturer. Last time when Fiat was in the headlines, it was about a merge with French Renault (RNO) in June 2019. Then the companies were also discussing about vehicle platforms and sharing engineering resources. According to media sources, this merge did not get the French government approval so the deal broke up.

This time the French government is also involved while the government is one of the biggest owners of Peugeot with 12 % ownership.

The new auto company would be the fourth largest in the world after Volkswagen, Toyota and Renault-Nissan. The industry is facing heavy technology changes due to electrification, emission reductions and autonomous driving. This has also caused that some manufacturers are calling for sharing tech platforms and R&D for electric car manufacturing.

The Milan listed Fiat stock closed up 9,5 % and the Paris based Peugeot also gained 4,5 % on Wednesday.

 

 

 

 

 

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Stocks markets rally – rate cut & QE possible

The stock markets rallied on Tuesday, when Federal Reserves Chairman Jerome Powell signalled a possible interest rate cut if needed. He was referring to the trade negotiations between the China and US. Also some markets estimates that the ECB, The European Central Bank, would start again the quantitative easing actions from January, lifted the trade worries.

Dow Jones index ended up 2,06 % to 25 332 points, S&P 500 index ended up 2,14 % to 2803 points and the technology-index Nasdaq closed up 2,65 % to 7527 points. According to Bloomberg News, this increase was the biggest since January.

The big banks and the car manufacturers were the leading sectors. The economic slowdown due to the trade tariffs between the China and US has been pushing the stocks downward trend.

The recent IPO-companies were mixed, the Uber (UBER) closed up 3,64 % to 42,53 dollars, while Lyft (LYFT) closed down 0,62 % to 59 dollars. The market speculation which of the new companies would power the better way to autonomous future continued. The electric car manufacturer Tesla (TSLA) closed up 8,17 % to 194,50 dollars.

From the financial markets side, Goldman Sachs (GS) ended up 3,65 % to 190,40 dollars and JP Morgan (JPM) closed up 3,08 % to 109,77 dollars.

The global economic situation was also in the World Bank´s new economic estimate on Tuesday, that the global economy is decreasing next year due to the trade situation. -Global economic growth is forecast to ease to a weaker-than-expected 2.6% in 2019 before inching up to 2.7% in 2020, the World Bank says.

The Dutch banking group ABN Amro said in their review that they expect the European Central Bank to start the quantitative easing program again in January 2020. They expect the buying of bonds start from 70 billion euros next year and that the ECB would need to rise the issuer limit from 33 % to as high as 50 %.

It is expected that this new policy decision will be given to the new ECB president, which is going to be elected during this year as part of the EU top jobs puzzle. Mr Mario Draghi is leaving the central bank during this year. The ECB is having its next Governing Council meeting on Thursday in Vilnius, Lithuania.

In Europe, the stocks ended also up and the FTSE 100 index closed up 0,41 % to 7214 points in London. In Germany the DAX-index closed up 1,51 % to 11971 points and in France the CAC 40 index ended up 0,51 % to 5268 points.

The euro was trading flat at 1,125 dollars and the sterling was up 0,01 % to 1,2699 dollars.

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Highlights of the year 2018 – Brexit, trade talks and green finance

The year 2018 was a year of Brexit, electric cars and trade talks. It included special moments in the financial markets and in the company side. Green Bonds and Green Finance were getting more attention in the markets and trade talks and Brexit were the topics during the year 2018 along. Climate Change and low carbon landed also in the agenda of central banks.

Investors were also asking what is the role of the City as a global financial hub. Should it have its own rules in spite of the Brexit? In the financial hub competition, Frankfurt and Paris were the European cities to get more new financial offices as financial companies were moving some operations to the EU side.

The UK Parliament is expected to vote of the Brexit during Janury 2019 after very intensive debate about the deal during the year.

Climate Change has become part of the everyday life in the financial markets and for example one of the biggest insurance companies in the US, Berskhire Hathaway informed in February 2018, that it has got 3 billion dollars losses of the natural catastrophies, the hurricances in the US. Several central banks, including the European Central Bank and some Asian ones, have also agreed about the co-operation in the climate issues and how to monitor the impact on the markets.

In the tech-side augmented reality and ioT were the themes for the year. Apple, Amazon, Google, Tesla, Intel  and Samsung  were one of the tech-companies to deliver new services related to the new technology. On the other side of the topic, Facebook was dealing with the privacy issues globally. New tech- companies listed in the markets were for example Spotify and Xiaomi.

Year 2018 was a year of electric cars in many countries. The e-cars breakthrough with charging issues was one of the tech topics as well. Telsa founder Elon Musk was the leading industry sector figure as he estimated that Tesla would make one million cars by 2020 in February 2018.

Also the German automakers announced new investments and concept cars. For example the BMW Group launched an autonomous driving campus in Munich in March 2018.

Year 2018 was also a year for luxury goods and services. The Basel World 2018 -fair announced its good selling and for example the CEO of Hublot, Ricardo Guadalupe,  told ComteamPUB+ that the company expects double digit growth for the year and that the Chinese customers will be the leading segment.

In the debt markets the US Uber and Netflix issued their junk bonds to investors. Uber, the ride-sharing company, is said to plan an IPO for the year 2019 according to the secret filings to the SEC.

One of the biggest infrastructure projects ever, the China Silk Road, is getting more attention from the green investors side, while the organization made its first announcement of the green principles for the project co-operation and operators. The ancient Silk Road is expected to rise the GDP growth by 4 % or 240 billion dollars in the countries invlolved according to Credit Suisse analysis.

The aim of the Roman time Silk Road is to connect the western Europe with the eastern coast of China and to renew the infrasturcture in between. This means also that the 10 world largest container ports are located along the route.

Trade talks between different countries have continued lively during the year. US and China have been in the headlines, but also the EU with its agreement with Japan.  The political situation and rising volatility in the financial markets tell the direction for the next year. Geopolitical easing is needed.

Päivi Härkönen, co-founder, ComteamPUB+

 

 

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BMW´s new autonomous driving campus in Munich

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The BMW Group  (BMW:GR) has opened its new autonomous driving campus in Germany,  Munich this week. This new centre reflects the company´s target to innovate and develop new standards for the future and to increase the sustainability leadership.

– 15 months ago, the BMW Group took the decision to pool together its development expertise in the fields of vehicle connectivity and highly / fully automated driving at a single location. The campus, which offers 23,000 square metres of office space with room for 1,800 employees, was completed in record time. The site’s optimum infrastructure, its proximity to the Research and Innovation Centre, and the nearby link to the motorway network helped to swing the decision in its favour, the company says in the press release.

The autonomous driving campus is using modern office interior design and technology in order to integrate the working as smooth as possible, from development to testing.

– This means, for example, that a software developer working at the new campus can immediately test out freshly written code in a vehicle that is just a short walk away, the company says.

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