By on December 17, 2019

Italian-American auto giant Fiat Chrysler and French automaker PSA Group could sign a Memorandum of Understanding on Wednesday, if reports out of Europe prove true.

The two automakers embarked down the road to a 50:50 tie-up in October, with both partners aiming for an MoU before the end of the calendar year. This most recent report comes on the heels of various thumbs-up given by key players in the pending marriage.

According to Reuters, the corporate embodiment of the Peugeot family has given the MoU their blessing, just one day after the French government, which owns a 12-percent stake in the automaker, gave its own green light.

The Peugeot family holds just under 14 percent of the automaker’s shares via two holding companies: Établissements Peugeot Frères (EPF), and a property and finance entity called FFP.

On Monday, Bloomberg reported that board directors from both automakers would meet Wednesday to discuss terms of a binding MoU after the French government signed off on the mildly revised plan. Earlier, French shareholders had expressed concern about the looming deal, demanding that France be given assurances that the country would retain a majority on the combined entity’s board if proposed CEO Carlos Tavares (currently CEO of PSA) took a hike for some reason.

Both FCA and PSA will have five board members apiece under the proposed plan, with the CEO being the 11th member.

With French government resistance being a factor in the scuttling of the proposed FCA-Renault merger, winning the approval of the country’s leadership removes a major hurdle. And with the Peugeot family now on board, the merger could be well underway by the New Year.

[Image: Fiat Chrysler]

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18 Comments on “Report: Fiat Chrysler, PSA on Cusp of Binding Merger Pact...”

  • avatar

    Have to give high marks to the folks at Auburn Hills. They’ve gone through so many transitions of ownership and organizations and still cranking out some decent stuff.

  • avatar

    The French will own one-third of the US auto industry. Let’s thank Mary Barra for selling Opel to PSA, which enabled them to take over FCA. GM will now be in fifth place among the world’s carmakers.

    Read about GM shrinking to fifth place in the article below.

    • 0 avatar

      everyone who has put market share as their top priority fumbles the ball once they have it.

      • 0 avatar

        GM did not fumble the ball for nearly a century. Toyota will at least have a 50 year run at the top without a fumble. They are nearly twice the size of GM now.

        GM simply was not building good enough vehicles to maintain the number one position.

    • 0 avatar

      >>Read about GM shrinking to fifth place in the article below.<<

      The big three all seem to be on the strategy that FCA put into words in it's Q3 report, that they are seeking higher profit, even if at the expense of volume. All three constantly boast about their ever higher transaction prices and gross margin per vehicle, objectives easily achieved if you stop making all your lower priced, lower margin, vehicles. Once the big three have all dropped their mass market passenger cars, I expect the small CUVs, like the Trax, Renegade and Ecosport to go.

      Of course, at some point, those who continue to pursue ATP and GM at the expense of volume, will eventually find they have lost the economy of scale that Henry Ford knew was vital. and, even though they have eye popping prices and gross margins, they will not be able to cover their fixed costs and necessary expenditures like R%D.

      • 0 avatar

        “It seemed like a good idea at the time”

        With record high stock markets and record low interest rates and low fuel prices, yes, the Detroit three is brilliant to profit margins.

        After all, we all know, that if the market changes tomorrow, and goes from 17 million, to say, 14 million, with car share of the bigger pie going up, the Detroit 3 can just turn around and change from trucks and CUVs to car because…they are that good!


        I don’t follow Europe, but what is Peugeot doing differently from what GM did regarding Opel?

        • 0 avatar

          >>I don’t follow Europe, but what is Peugeot doing differently from what GM did regarding Opel?<<

          The claims include that Tavares stopped discounting the daylights out of the Opels. My suspicion is it's because the Opel R&D budget, and probably CAPEX in the Opel plants were zeroed out. If your plan is to let the existing products and plans run down, until they are replaced by rebadged Pugs, at minimal additional cost, your operation will be a lot more profitable.

      • 0 avatar

        They will probably cut their way to extinction. Ford, GM, and FCA have no choice now but to concentrate on profits, because they just can’t compete in quality. Even Cadillac is at the back of the pack in reliability. When you ask the French for a bailout you know things have gotten bad.

        This is the auto culture Barra, Sergio, and Hackett have created.

    • 0 avatar

      Opel has nothing to do with US even if you include Buick Regal which is 0.000001% of market. And then Chrysler had all opportunities including support by US Government and it had plenty of cash in bank but still Eaton sold it out for his personal enrichment. You cannot blame that on GM, Ford or PSA.

  • avatar

    Any word on whether Peugeot will move to buy the Detroit Lions?

    After all, if they are buying Chrysler, why not buy the Detroit Lions while they are at it?

    The Lion’s logo and Peugeot’s Lion are very similar.

    Just like Chrysler can’t seem to make it on their own, since Iacocca vengefully gave the CEO job to GM exec Eaton (instead of brilliant Bob Lutz), and Eaton gave/sold Chrysler to D-Benz (at considerable benefit to himself), the Detroit Lions can’t seem to make it under the (mis)stewardship of the Ford family.

    Rename Ford Field “Palais de Peugeot”, and make the Lions a serious contender, instead of a punching bag for other NFL teams.

    I think this would an excellent way to ‘consummate’ the ‘marriage of equals’

    Making the Lions winners would show that Peugeot is a force to be reckoned with.

  • avatar

    This will buy them another 10 years

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