Uncertainty may abound these days, but Fiat Chrysler Automobiles (FCA) shareholders were reassured at their annual meeting that the proposed merger with PSA Group remains on track to be finalized by the end of the first quarter of 2021. PSA Group shareholders were given the same message at their annual meeting this week, as well.
After a year of planning, FCA and PSA announced their plans for a 50-50 merger on December 18, 2019. The news followed many years of efforts by FCA’s former head, Sergio Marchionne, to merge the Italian-American company with another automaker. Doing so would achieve the scale he believed was necessary to be successful in an industry reliant on the development of expensive technology to transition to a lineup of electric and autonomous vehicles.
The merged PSA-FCA—no new name has been released—will be the fourth-largest automaker by volume in the world. Both companies date back more than a century and bring a number of automotive brands with them including Jeep, Ram, Dodge, Chrysler, Fiat, Maserati, Alfa Romeo, Lancia, Peugeot, Citroen, DS, and Vauxhall-Opel. The expectation is some of them will have to go away; the stable is too full.
FCA chief executive officer (CEO) Mike Manley said work to complete the merger has continued at pace, despite a pandemic, to meet the goal of finalizing the merger by the end of the first quarter of 2021. The new entity will have a more balanced global footprint and the financial flexibility to invest in new technology. Its global scale for purchasing and $4.2 billion in synergies between the two companies will result in huge efficiencies and capabilities, Manley said during the general shareholder meeting. The new company will have the attributes to be a successful leader in a new world.
Manley said leadership at the two companies have an excellent rapport on a personal level. FCA chairman John Elkann will chair the new group, PSA CEO Carlos Tavares will lead the new company, and Manley will have a senior role, potentially chief operating officer.
Additionally, Manley added the required investigation by the European Union anti-trust regulators is not expected to delay the merger and the proposed new company has already received anti-trust approvals by the United States, China, Russia, and Japan.