Fiat Chrysler Automobiles (FCA) and PSA are likely to receive EU approval for their proposed $38 billion merger creating the world’s No.4 leading carmaker, according to Reuters. EU approval to pave the way for the creation of Stellantis, a carmaking entity that would tap huge profits from selling Ram pickup trucks and Jeep SUVs to U.S. drivers to fund the development of zero-emission vehicles in Europe and China.
- FCA and PSA expect to complete the merger in Q1 2021, while the EU decision would come by the end of the year, ahead of the February 2 deadline.
- Fiat-PSA is an all-share merger and would unite Fiat, Jeep, Dodge, Ram, and Maserati with Peugeot, Opel, and DS.
- Merger targets annual cost cuts of 5 billion euros or $6 billion without factories’ closure and the firms restructured the terms of the deal to conserve cash and lead to targeted cost savings.
- PSA to strengthen Japanese rival, Toyota Motor Corp, with which it has a van joint venture, by ramping production and selling at close to cost price, to address EU’s antitrust concerns
PSA and FCA stocks are gaining. FCA is up 2.67%, PSA is up 2.97%