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Fiat and PSA Peugeot-Citroen deny merger rumors

Fiat and PSA Peugeot-Citroen deny merger rumors

Kenneth Hall March 13th, 2009 Kenneth Hall By Kenneth Hall Author March 13th, 2009
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December 31st, 1969 Fiat Group, Chrysler and its parent company Cerberus Capital Management in January released a joint statement announcing they had signed a non-binding term sheet to establish a global strategic alliance. The alliance, a key element of Chrysler’s viability plan, would provide the American carmaker with access to competitive, fuel-efficient vehicle platforms, new powertrains, and components to be produced at Chrysler manufacturing sites. Soon after the initial statement, rumors suggesting PSA Peugeot-Citroen could also be in merger talks with Fiat quickly emerged. Both companies have since denied the rumors, telling Italy's Il Sole 24 Ore newspaper that there are no plans to merge with any other parties. However, both have reiterated that they are open to cooperating with other companies on projects that could create industrial synergies or open access to new markets. According to an insider, however, Italian investment bank Mediobanca has been contacted by Fiat about drawing up a report on merging Fiat's automotive operations with those of PSA. Previous reports also suggested that Fiat was searching Europe to secure a credit line of up to €5 billion to finance a takeover of PSA. While no one is suggesting that Fiat and PSA are about to merge, it’s often the case that the companies deny rumors only when there is some truth behind them. We wouldn’t be surprised to see some kind of a deal forged, though don’t expect a full blown alliance like the one that will likely take place between Fiat and Chrysler.
Both companies have denied the merger rumors yet they are still open to cooperating on joint-projects

Both companies have denied the merger rumors yet they are still open to cooperating on joint-projects

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Fiat Group, Chrysler and its parent company Cerberus Capital Management in January released a joint statement announcing they had signed a non-binding term sheet to establish a global strategic alliance. The alliance, a key element of Chrysler’s viability plan, would provide the American carmaker with access to competitive, fuel-efficient vehicle platforms, new powertrains, and components to be produced at Chrysler manufacturing sites. Soon after the initial statement, rumors suggesting PSA Peugeot-Citroen could also be in merger talks with Fiat quickly emerged.

Both companies have since denied the rumors, telling Italy's Il Sole 24 Ore newspaper that there are no plans to merge with any other parties. However, both have reiterated that they are open to cooperating with other companies on projects that could create industrial synergies or open access to new markets.

According to an insider, however, Italian investment bank Mediobanca has been contacted by Fiat about drawing up a report on merging Fiat's automotive operations with those of PSA. Previous reports also suggested that Fiat was searching Europe to secure a credit line of up to €5 billion to finance a takeover of PSA.

While no one is suggesting that Fiat and PSA are about to merge, it’s often the case that the companies deny rumors only when there is some truth behind them. We wouldn’t be surprised to see some kind of a deal forged, though don’t expect a full blown alliance like the one that will likely take place between Fiat and Chrysler.

Tags: Industry, Renault, Citroen, Peugeot, hybrids, ENVI, Sergio Marchionne, Partnership

Posted in: Toyota, Chrysler, Fiat, Nissan, News, Electric Cars, Hybrid, EV


Comments (22 total)

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  1. ma_sikafoose avatar by sikafoose #1, Posted: 1/19/2009

    Gee, GM basically bails out Fiat several years ago and now Fiat to bail out Chrysler? Strange world!

  2. ma_sikafoose avatar by sikafoose #2, Posted: 1/19/2009

    Gee, GM basically bails out Fiat several years ago and now Fiat to bail out Chrysler? Strange world!

  3. ma_NoNameDenton avatar by NoNameDenton #3, Posted: 1/19/2009

    How about the 500 underpins a small car for Chrysler, and the 300/Charger/Challenger can underpin some rwd products for Alfa.

  4. ma_azlan avatar by azlan #4, Posted: 1/19/2009

    chrysler please dont corrupt fiat there past few cars have been pretty good.

  5. ma_NoNameDenton avatar by NoNameDenton #5, Posted: 1/19/2009

    No worries azlan, if GM couldn't screw up Fiat doubt Chrsyler could

  6. ma_azlan avatar by azlan #6, Posted: 1/20/2009

    haha i hope your right =]

  7. ma_saabfan avatar by saabfan #7, Posted: 1/20/2009

    I wonder what would the offspring of Fiat and Chrysler would look like. AMC pacer? Finally I can't wait for Alfa to be here.

  8. ma_dcars avatar by dcars #8, Posted: 1/20/2009

    I hope Fiat isn't as bad as M&B was with business, planning and engineering. Chrysler won't survive another merger of equals.

  9. ma_Roy avatar by Roy #9, Posted: 1/20/2009

    That's an enormous poison pill to swallow. I can't believe that Fiat would take such a huge stake in such a lousy car company. Reminiscent of humpty-dumpty, M-B sent all their best engineers over to the US, and still couldn't fix Chrysler. It shored Chrysler up in the short-term but took a huge toll on M-B quality, engineering, and design.
    In lots of ways this makes sense: Fiat sells a lot of small and medium front-drive cars, but also owns luxury marques like Maserati and Ferrari. The gap in their line-up lines up nicely with Chrysler's expertise: trucks and SUVs. Let's hope Fiat tells Chrysler to slim down and focus on their core strengths.

  10. ma_dcars avatar by dcars #10, Posted: 1/20/2009

    Before M&B came along Chrysler was profitable, had reliable cars, had four divisions and had high fleet MPG. When M&B "and their engineers" got done with them, reliability dropped, was not profitable, lost market share, engineering was terrible and the cars became ugly and inefficient.

  11. ma_adamk avatar by adamk #11, Posted: 1/20/2009

    I definitely understand Fiat's desire to get back in the U.S. (I'd love to buy a modern Alfa), but there can't be much left in Chrysler's stables that Fiat could sell in Europe. Dodge Ram pickups? I think not? Chrysler 300? Not in any measurable numbers, given its size. Minivans? Already made in Europe and sold there. Jeeps? Maybe, but Europeans largely shun SUVs. Good thing this isn't costing Fiat a dollar or euro.

  12. ma_dcars avatar by dcars #12, Posted: 1/20/2009

    Alfa always had some great looking and sounding cars. Nice to see them back in the US.

  13. ma_NoNameDenton avatar by NoNameDenton #13, Posted: 1/20/2009

    This is not like the MB situation, this is an alliance not a merger

  14. ma_Suggs avatar by Suggs #14, Posted: 1/21/2009

    Just hope that some of the Design flair that the Italians have heads towards Chrysler

  15. ma_NoNameDenton avatar by NoNameDenton #15, Posted: 1/21/2009

    Well, Chrysler has proven they can do great designs, look at the 200C concept.

  16. ma_NoNameDenton avatar by NoNameDenton #16, Posted: 1/23/2009

    I heard the opposite I heard PSA was not ging to join

  17. ma_NoNameDenton avatar by NoNameDenton #17, Posted: 1/23/2009

    http://www.leftlanenews.com/fiat-denies-peugeot-citroen-merger-plans.html

  18. ma_NaBUru38 avatar by NaBUru38 #18, Posted: 3/13/2009

    Jeeps? Maybe, but Europeans largely shun SUVs.
    Get a compass, adamk.

  19. ma_adamk avatar by adamk #19, Posted: 3/13/2009

    NaBUru38: I'm not sure what a compass or any other navigational device has to do with my original statement that most Europeans do not share the American fondness for SUVs. My point remains that Fiat's small car expertise is likely to be of more benefit to Chrysler than anything the U.S. automaker might hope to sell in Europe.

  20. ma_NoNameDenton avatar by NoNameDenton #20, Posted: 3/13/2009

    Not new news

  21. ma_NaBUru38 avatar by NaBUru38 #21, Posted: 3/14/2009

    adamk, read this list: X1, X3, GLK, XC60, Q3, Q5, Q7, 3008, 4007, C-Crosser, Tiguan, Kuga, Sedici, Qashqai, Yeti. If Europeans weren't interested in SUVs, why would they release so many of them?

  22. ma_I h8 China avatar by I h8 China #22, Posted: 3/14/2009

    The Chrysler 300C is sold in Europe as a sort of luxury car. Jeeps are sold here too. We also get the Dodge Viper, Nitro (hideously ugly), Magnum and Chrysler Sebring. You do see a few SUVs on the roads here, but they're mostly owned by the more wealthy.

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