Peugeot In Talks To Merge With Fiat Chrysler

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FCA is very keen on the French this year.

Reports are coming in that PSA, the owner of the French car brand Peugeot, is in talks with Fiat Chrysler Automobiles (FCA). The Financial Times is reporting that PSA and its chief executive Carlos Tavares is attempting to take advantage of the recent failed FCA and Renault merger. Before the $35 billion merger Renault merger broke down, there had already been talks between Peugeot and FCA. It seems they are continuing as FCA is intent on following the company's late chief executive Sergio Marchionne's tactic of consolidating the auto industry. According to sources, Tavares and FCA Chairman John Elkann have been talking directly with each other about a deal.

Peugot
Peugot
Peugot

According to the Financial Time's source, one possible form of the deal could be an all-stock merger to combine PSA and FCA with Elkann as chairman and Tavares running the business. Discussions are at an early stage, though, and there's no guarantee a deal will be reached. However, as a result of the talks being reported on, shares in FCA jumped more than 7 percent late on Tuesday.

FCA does already have a commercial partnership with Peugeot, and Peugeot has also been making plans to come back to America. These two factors are likely why this dance around a merger has been going on for so long.

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Fiat
Fiat
Fiat

The fact is that FCA wants to scale up in Europe while Peugeot intends to come to America, so the two companies would, in theory, work well together. Currently, Peugeot's plans for the US involves not bringing European models over, but to build cars that work in all markets. It was Peugeot's insistence of bringing cars not ideally suited to the American market last time around that, along with build quality, forced the company to leave in the first place.

While we won't see cars from Peugeot here, Europeans also likely wouldn't suddenly start seeing Dodge Challengers either. Instead, we would probably begin to see shared global platforms based around electric and hybrid drivetrains.

Alfa Romeo
Alfa Romeo
Alfa Romeo

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