Fiat Chrysler, Peugeot discussing $50B merger

Fiat Chrysler and the owners of French automaker Peugeot confirmed Wednesday that they are exploring a potential $50 billion merger that would create one of the largest automobile giants in the world.

In a statement to The Hill, Fiat Chrysler confirmed that discussions were ongoing: “Following recent reports on a possible business combination between Groupe PSA and FCA Group, Fiat Chrysler Automobiles N.V. (‘FCA’, NYSE: FCAU /MTA: FCA), confirms there are ongoing discussions aimed at creating one of the world‘s leading mobility Groups.”

“FCA has nothing further to add at this time,” they added.

{mosads}Reuters reported that the total number of vehicles produced last year by the two companies would make a merged company the fourth-largest automaker in the world, behind Volkswagen, Toyota and Renault/Nissan.

A senior equity analyst at Morningstar told Reuters that his company views the potential merger as “reasonable” given the amount of competition in the auto industry worldwide, especially amid the rise of electric and autonomous vehicles.

“We view the combination of these two companies as reasonable given global competition, high capital intensity, and industry disruption from electrified powertrain as well as autonomous technologies,” Richard Hilgert told the news service.

Fiat Chrysler was previously reported to have been pursuing a merger with Renault, which is closely tied to fellow automaker Nissan, though plans for that merger were eventually scrapped.