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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Volvo Cars and Geely to combine R&D and engine operations in electric cars

The new Volvo XC60

The Swedish Volvo Cars and its Chinese owner, Geely have announced a plan to combine their electric cars R&D and engine operations. The aim is also that the new unit will offer the services to other customers in the future. The change is part of the Volvo Car´s focus in electrification of its whole production.

This means that the companies intend to merge their existing combustion engine operations into a stand-alone business that will seek to develop next generation combustion engines and hybrid powertrains.

– The proposed new business would clear the way for Volvo Cars to focus on the development of its all-electric range of premium cars. Volvo Cars is building an entirely electrified product range, as part of the company’s ambition to put sustainability at the core of its operations. By the middle of the next decade it expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit, Volvo said in its press release.

– For Geely, the planned new entity means technologically-advanced and efficient combustion engines and hybrid powertrains would be available to Geely Auto, Proton, Lotus, LEVC and LYNK & CO. The planned new stand-alone business can also supply third party manufacturers, providing possible growth opportunities, companies say.

The new entity will have 3000 employees from Volvo Cars and around 5000 employees from Geely´s combustion engine operations.

Volvo Cars believes the electrification of the automotive industry will be a gradual process, meaning there will be significant ongoing demand for efficient hybrid powertrains alongside fully-electric offerings.

-Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently, said Håkan Samuelsson, Volvo Cars’ president and chief executive.

The detailed plans of the new business are under development and subject to union negotiations as well as board and relevant authority approvals, companies say.

Volvo Cars is about to launch its first fully electric XC40 in October 16th. Later in October Volvo will also publish its Q3 report.

Picture: The new Volvo XC60 T8 R-Design in Crystal White

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