Finance Ministry presents three new investor facilitation packages to PM to boost investment climate    Egypt, Bahrain explore deeper cooperation on water resource management    Egypt condemns Israeli offensive in Gaza City, warns of grave regional consequences    Cairo University, Roche Diagnostics inaugurate automated lab at Qasr El-Ainy    Egypt expands medical, humanitarian support for Gaza patients    Egypt investigates disappearance of ancient bracelet from Egyptian Museum in Tahrir    Egypt launches international architecture academy with UNESCO, European partners    African trade ministers meet in Cairo to push forward with AfCFTA    Egypt's President, Pakistan's PM condemn Israeli attack on Qatar    Egypt signs MoUs with 3 European universities to advance architecture, urban studies    Madrid trade talks focus on TikTok as US and China seek agreement    Egypt wins Aga Khan Award for Architecture for Esna revival project    Egypt's gold prices hold steady on Sep. 15th    Egypt's Sisi, Qatar's Emir condemn Israeli strikes, call for Gaza ceasefire    Egypt condemns terrorist attack in northwest Pakistan    Egypt advances plans to upgrade historic Cairo with Azbakeya, Ataba projects    Egyptian pound ends week lower against US dollar – CBE    Egypt hosts G20 meeting for 1st time outside member states    Egypt to tighten waste rules, cut rice straw fees to curb pollution    Egypt seeks Indian expertise to boost pharmaceutical industry    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egyptian, Ugandan Presidents open business forum to boost trade    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Fiat Chrysler, Peugeot owner agree binding $50 bln merger deal
Published in Ahram Online on 18 - 12 - 2019

Fiat Chrysler and Peugeot maker PSA have reached a binding agreement over their roughly $50 billion merger that will reshape the global car industry.
France's PSA and Italian-American Fiat Chrysler (FCA), which are yet to decide on a name for their new company, will now start work on delivering their pledge to cut costs by 3.7 billion euros ($4.1 billion) a year without closing factories.
That will be all the harder with politicians and strong labour unions in both France and Italy worried about job losses at a combined business that will employ around 400,000 people.
"The merged group will have to make massive savings and probably also close plants, even if the CEOs' choice of words is different," said NordLB autos analyst Frank Schwope after the binding agreement was announced on Wednesday.
French finance minister Bruno Le Maire, meanwhile, welcomed the move to bring together Europe's second and third biggest carmakers, while adding the French government - a key shareholder in PSA - would remain vigilant on matters including where "decision centres" are located within the new group.
PSA and FCA announced preliminary plans six weeks ago for a 50-50 all-share tie-up that will rank as the world's fourth-largest automaker behind Volkswagen, Toyota and the Renault-Nissan alliance.
The deal is aimed at helping both companies cope with slowing autos demand and the cost of building cleaner cars to meeting tougher emissions regulations.
With brands including Jeep, Dodge, Ram, Chrysler, Alfa Romeo, Maserati and Opel, the companies sold a combined 8.7 million vehicles last year, but have potential manufacturing capacity of 14 million, according to forecasters LMC Automotive.
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.
"At this stage nothing is decided. We have been evaluating what the opportunities are," PSA Chief Executive Carlos Tavares, who will head up the merged entity as CEO, told reporters.
There is no time to lose as both PSA and FCA are "currently lagging far behind the competition in terms of technology and product range," NordLB's Schwope said.
PSA and FCA said in a statement they expected the deal to close in the next 12 to 15 months, and they would come up with a name over the coming months.
FCA said it would meet unions on Friday to discuss the merger.
At 0845 GMT, PSA shares were up 1.2% at 22.37 euros. FCA's stock was up 0.2% at 13.63 euros.
SMOOTHING THE WAY
Before the merger is completed, one of PSA's shareholders, China's Dongfeng Motor Group, will trim its 12.2% stake in the French firm by selling 30.7 million shares to PSA.
That stake was worth 679 million euros ($748 million) at the most recent closing price, and Dongfeng will have 4.5% of the merged group. Its smaller stake is seen as helping the deal gain regulatory approval in the United States.
"This is the way of supporting this merger and making sure we don't have bumps on the road," Tavares said.
PSA and FCA confirmed the new group would have an 11-strong board, with five members nominated by PSA and another five by FCA. These will include labour representatives from both.
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.
The companies did not clarify what would happen when Tavares leaves. Two sources close to PSA told Reuters last week that French stakeholders were seeking reassurances they would retain a numerical advantage on the board.
A shock lawsuit by General Motors filed last month against FCA in the United State over alleged union bribing did not affect the merger terms, FCA CEO Mike Manley told reporters, reiterating the claim was "meritless".
Manley said he hoped FCA would "now dispose of that quickly" and if not, the company would defend itself vigorously. ($1 = 0.9073 euros)


Clic here to read the story from its source.