Fiat Chrysler, Peugeot shareholders to vote on merger

Fiat Chrysler, Peugeot shareholders to vote on merger

SeattlePI.com

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MILAN (AP) — The marriage of carmakers PSA Peugeot and Fiat Chrysler Automobiles is built on the promise of cost-savings in the capital-hungry industry, but what remains to be seen is if it will be able to preserve jobs and heritage brands in a global market still suffering the shakeout from the pandemic.

Shareholders vote Monday on a deal to create the world’s fourth-largest carmaker, to be called Stellantis, with the capacity to produce 8.7 million cars a year, behind Volkswagen, Toyota and Renault-Nissan, and create 5 billion euros in synergies.

It will put together under one roof French mass-market carmakers Peugeot and Citroen, top-selling Jeep and Italian luxury and sports brands Maserati and Alfa Romeo - pooling companies that have helped define the industry in the United States, France and Italy.

While the tie-up is billed as a merger of equals, the power advantage goes to PSA, whose CEO Carlos Tavares will run Stellantis and hold the tie-breaking vote on the 11-seat board. Tavares is set to take full control of the company early this year, possibly by the end of January.

Fiat Chrysler chairman John Elkann, heir to the Fiat-founding Agnelli family and Fiat Chrysler’s biggest shareholder, will be the Stellantis chairman. Fiat Chrysler CEO Mike Manley will head North American operations, which is key to Tavares' long-time goal of getting a U.S. foothold for the French carmaker he has run since 2014, and the clear money-maker for Fiat Chrysler.

Such a deal was long wanted by Fiat Chrysler’s long-time CEO Sergio Marchionne, who had predicted the necessity of consolidation in the industry. He was unable to find a deal before his sudden death in July 2018.

Tavares comes into the new role with a reputation as a cost-cutter and skilled manager, qualities he put to use as head of Nissan’s North American...

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