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Fiat Chrysler and PSA boards sign off on merger

MILAN — The boards of French carmaker PSA, the owner of Peugeot, and Fiat Chrysler in separate meetings on Tuesday approved a binding agreement for a $50 billion merger, sources said. The two midsized carmakers announced plans six weeks ago for a tie-up to create the world's No. 4 carmaker and reshape the global industry. A merger is seen helping them deal with big challenges in the industry, including a global downturn in demand and the need to develop costly cleaner cars to meet looming anti-pollution rules. Both companies declined to comment. A source close to FCA had said earlier the two companies could formally announce the agreement early on Wednesday, followed by a conference call to explain further details later in the day. China's Dongfeng Motor Group, which now has a 12.2% equity stake in PSA, will have a reduced stake of around 4.5% in the merged group, two sources said, in a move that could help make regulatory approval easier. According to the deal approved by PSA's board on Tuesday, FCA's robot unit, Comau, will remain within the combined group rather than be spun off as was originally planned in October, the sources said. The new group will evaluate how to extract value from Comau. Ahead of the meetings, entities representing the Peugeot family, Etablissements Peugeot Freres (EPF) and FFP, unanimously approved a proposed memorandum of understanding for the planned merger, a source familiar with the situation said. FCA and PSA are expected to finalise a deal by the end of 2020 to create a group with 8.7 million annual vehicle sales, a source said. That would put it fourth globally behind Volkswagen AG, Toyota and the Renault-Nissan alliance. It was only six months ago that FCA abandoned merger talks with PSA's French rival Renault. FCA would gain access to PSA's more modern vehicle platforms, helping it meet tough new emissions rules, while Europe-focused PSA would benefit from FCA's profitable U.S. business featuring brands such as Ram and Jeep. However, the deal could still face close regulatory scrutiny, while governments in Rome, Paris and unions are all likely to be wary about potential job losses from a combined workforce of around 400,000. PSA's Carlos Tavares will be chief executive and FCA's John Elkann — the scion of Italy's Agnelli family, which controls FCA through their holding company Exor — chairman of the combined company.

Fiat Chrysler, Peugeot announce merger as world's No. 4 carmaker

MILAN  — Fiat Chrysler and France's PSA Peugeot said Thursday they have agreed to merge to create the world's fourth-largest automaker with enough scale to confront big shifts in the industry, including a race to develop electric cars and driverless technologies. Italian-American Fiat Chrysler brings with it a strong footprint in North America, where it makes at least two-thirds of its profits, while Peugeot is the No. 2 automaker in Europe. Both lag in China, however, despite the participation of Peugeot's Chinese shareholder, Dongfeng, and are playing catching up in developing electric vehicles. Fiat Chrysler shares were trading up 9% at 14 euros in Milan, while PSA Peugeot shares were down 3.2% to 22.84 euros. The 50-50 merger is expected to offer savings of 3.7 billion euros ($4 billion), which the automakers expect to achieve without any factory closures — a concern of unions in both France and Italy where the carmakers have more overlap. Fiat Chrysler's strongest brands are Jeep SUVs and Ram trucks and it is focusing on relaunching its premium and luxury brands, Alfa Romeo and Maserati, with a focus on hybrid engines. It still makes smaller cars under the Fiat marquee, mostly for the European and Latin American markets. PSA Peugeot makes mostly small, city-friendly cars, family sedans and SUVs under the nameplates of Peugeot, Citroen and Germany-based Opel, which it bought in 2017. That is where the companies can expect to have the most overlap. The new company would be worth $50 billion, with revenue of 170 billion euros ($189 billion). It would produce 8.7 million cars a year — still behind Toyota, Volkswagen and the Renault-Nissan alliance, which make over 10 million each. Once a merger is finalized, PSA Peugeot CEO Carlos Tavares will be chief executive of the new company, with Fiat Chrysler Chairman John Elkann becoming chairman. Fiat Chrysler CEO Mike Manley will have a senior executive role. "This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity," Tavares said in a statement. Manley called it "an industry-changing combination," and noted the long history of cooperation with Peugeot in industrial vehicles in Europe. The 11-member board will be made up of five members from each company plus Tavares, who is locked in as CEO for five years.

Chrysler reportedly to drop 300 sedan, build Portal millennial minivan

Automotive News Canada pointed its divination stick at Chrysler as part of its Future Product Pipeline series. The publication dug up two revelations, one being that the Chrysler 300 has two more years to live, ending production come 2020. The article said nothing about the 300's platform twin, the Dodge Charger. The death of the 300 would leave the Pentastar brand with just one offering, the Pacifica minivan. AN Canada's other revelation was Chrysler would allay that fate by putting the "six-passenger multi-purpose" Portal concept into production for 2020. The automaker that wants to be known for its people haulers introduced the Portal concept at the 2017 Consumer Electronics Show. The big bang at the time was the Portal having been designed by millennials in Chrysler's design department, specifically for millennial buyers. Feature bait for the confounding demographic included facial and voice recognition so the Portal knew who was in the car and could tailor the driving environment and cockpit to their tastes; a panoramic dashboard; a configurable interior so the owner can create space where needed, up front or in the cargo area; vehicle-to-vehicle and vehicle-to-infrastructure tech; upgradeable Level 3 autonomy; a retractable aviation-like steering wheel; and customizable light signatures. We didn't get many specs on the show car, but the all-electric powertain employed a 100-kWh lithium-ion battery, had a range of at least 250 miles, and could restore 150 of those miles in 20 minutes hooked up to a DC fast charger. Reasonable specs for a real vehicle. It wouldn't be an outrageous move for Chrysler to create a production version of the Portal. When the concept came to the 2018 Detroit Auto Show, former Fiat Chrysler CEO Sergio Marchionne told media he intended to roll out the "fifth generation" of family cars — the next evolution of the wagon-minivan-SUV-crossover progression — and he expected the Portal or something similar to make production at some point. The Detroit News predicted we'd get a Portal sometime after 2018. Tim Kuniskis, then head of FCA passenger cars in North America, said the company viewed the Portal as that fifth-gen product and "the future of family transportation." On top of that, the designers based the front-wheel-drive Portal on the Pacifica's platform, and Marchionne was vocal in his desire for another retail product on that architecture. He had said, "I need another minivan.