A $48 billion merger between Fiat Chrysler and Peugeot owner PSA Group is creating the world’s third-largest automaker.
What We Know:
- The reason for the merge could be due to the slowdown of auto sales globally and the newly developed autonomous cars which are more expensive to produce and will threaten the traditional industry model. China and Europe are also setting strict targets for emissions with these car companies.
- The two companies will be centered in the Netherlands where Fiat originally was located. The company will have 410,000 employees with annual revenues of $190 billion.
- Shareholders of the automakers would own 50% of their operations. Fiat shareholders would also get a €5.5 billion dividend, according to CNN.
- Jessica Caldwell, Edmunds’ executive director of industry analysis said the planned merger of Fiat Chrysler and France’s PSA “isn’t really about product or expanding to new markets”. It’s actually about creating cars that stand the test of time.
Their competition is also looking to gain an advantage. For example, Volkswagen and Ford are working together to develop electric and self-driving vehicles.