Chrysler Fiat and Peugeot French agreement for $46 billion merger, creating the fourth largest producer of cars in the world

Chrysler Fiat and Peugeot French agreement for $46 billion merger, creating the fourth largest producer of cars in the world

PSA and Fiat Chrysler Group decided to combine car into an agreement, the fourth largest automaker in the world will create. The French and Italian-American automobile manufacturer for a 50-50 merger of their companies have signed a definitive agreement, they said in a statement on Wednesday. The merged company will from PSA CEO Carlos Tavares, with Fiat Chairman John Elkann holds will be performed the same role at the enlarged company. The concentration forge a regional center for German rival Volkswagen AG and a market capitalization of about $46 billion, surpassing Ford Motor Co. have also together two auto-making tie-up brings dynasties – the billionaire Agnelli clan of Italy, led Fiat Chairman John Elkann, and Peugeot of France. The combination gives the manufacturer PSA Peugeot a long-awaited presence in North America and to help gain ground in the development of technologies with low emissions of Fiat. But no, it does not solve all their faults, Juergen Pieper, an analyst at B. Metzler Seel Sohn & Co. told Bloomberg Television on Tuesday. The business is still “very good premium brands” and lacking “a good position in China,” he said. As a leader in the industry, Tavares and respond Elkann pressure for resources to grow for product development, manufacturing, and decided to meet the trade wars and an expensive shift from electrical and automotive technology. Companies want to get 3.7 billion euro a year in synergies from the transaction without closing plants, unchanged from the target announced when he presented six weeks before their merger discussions. The challenges are many, beset by improving European activities of Fiat to meet strict new rules for emissions to kick in next year in Europe. Tavares, is known as a sober cost-cutter even the political cross-currents in France, Italy and the US, where automakers have to navigate deep national roots. However, he has hard work before facing. Tavares led the French carmaker’s rear edge in 2014 taking over and revive the Opel brand in loss before GM two years to acquire. China’s Dongfeng Motor Corp., which owns 12% of PSA, will see its share decline to 4.5% combined company following the merger and the sale of part of its stake in the French automaker. participation of Dongfeng PSA has attracted attention because of the possibility that it could influence the US approval for the deal. Larry Kudlow US economic adviser said last month that the administration Trump would review the proposed merger because the operation would give the Chinese carmaker a stake in the combined company. Tavares, on a call with reporters said that the company expects no major problems from the authorities.
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