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FCA & Groupe PSA plan to join forces

To create the fourth largest global OEM

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FCA & Groupe PSA plan to join forces
FCA & Groupe PSA plan to join forces

Discussions  have  opened  a  path  to  the  creation  of  a  new  group  with  global  scale  and resources  owned  50%  by  Groupe  PSA  shareholders  and  50%  by  FCA  shareholders.  In  a rapidly  changing  environment,  with  new  challenges  in  connected,  electrified,  shared  and autonomous mobility, the combined entity would leverage its strong global R&D footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency. The combination would unite the groups’ respective brand strengths across Luxury, Premium,   Mainstream Passenger Car, SUV and Trucks & Light Commercial –making them stronger together.

The proposed combination would create the 4th largest global OEM in terms of unit sales (8.7 million vehicles), with combined revenues of nearly €170 billion and recurring operating profit of over €11 billion on a simple aggregated basis of 2018 results excluding Magneti Marelli and Faurecia. The significant value accretion resulting from the transaction is estimated to be approximately €3.7 billion in annual run-rate  synergies  derived  principally from a more efficient allocation of resources for large-scale investments in vehicle platforms, powertrain  and  technology  and  from  the  enhanced  purchasing  capability  inherent  in  the combined group’s new scale. These synergy estimates are not based on any plant closure

It is projected that 80% of the synergies would be achieved after 4 years. The total one-time cost of achieving the synergies is estimated at €2.8 billion. 

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