PARIS/MILAN: Fiat Chrysler and Peugeot maker PSA have struck a binding deal to create the world's fourth biggest carmaker, and now face the challenge of winning over regulators and delivering on a pledge to slash costs without closing factories.
France's PSA and Italian-American Fiat Chrysler Automobiles announced a preliminary deal six weeks ago for an all-share merger that would create a company worth about US$50 billion and unite brands such as Fiat, Jeep, Dodge, Ram and Maserati with the likes of Peugeot, Opel and DS. They have yet to say precisely how they plan to tackle that potential excess, and which car platforms - or underlying vehicle structures - they will focus on, only detailing that most production would be concentrated on two platforms.
"This is obviously a huge consolidation of the sector that will surely require a considerable effort in securing competition across a variety of jurisdictions and especially the European Union," said Jonathan Branton, head of competition at global legal business DWF. "This is the way of supporting this merger and making sure we don't have bumps on the road," said PSA CEO Carlos Tavares, who will be chief executive of the combined group.FAMILY AFFAIR
Tavares, whose initial five-year term as CEO will begin once the deal has closed and gained all approvals, will have the additional seat on the board.