Shares Surge As Peugeot Boss Says FCA Merger Is Possible

Shares in both Fiat Chrysler Automobiles and Peugeot have jumped following a suggestion that the French automaker is open to a merger with FCA.

The president of Peugeot family holding company FFP, Robert Peugeot, told French newspaper Les Echos that he would support a potential deal with FCA, Reuters reports.

“With them, as with others, the planets could be aligned,” Peugeot said.

While FCA declined to comment on the report, shares in the car manufacturer jumped by 5.2 per cent. Shares in Peugeot also rose by 2.7 per cent.

In recent weeks, both the boss of PSA Group, Carlos Tavares, and FCA’s new boss Mike Manley, have indicated they’re open to mergers. According to Tavares, the company views the likes of Fiat, General Motors, and Jaguar Land Rover as ideal partners.

FCA could be the perfect merger partner for PSA Group considering the Italian-American company’s strong presence across North America. By comparison, the majority of PSA Group’s sales are concentrated in Europe.

“PSA is essentially an EU pure play as things stand (roughly 90 percent of consolidated unit sales in EU) so an acquisition of a company with a broader reach would make strategic sense,” Evercore ISI analyst Arndt Ellinghorst said.

A merger has long been on the agenda for Fiat Chrysler Automobiles. For years, the late Sergio Marchionne actively pursued merging FCA with another company but his plans were pushed back by the likes of General Motors and others. In an automotive market where production and technology partnerships are becoming increasingly common, it seems as though FCA is eager to ensure it doesn’t miss out.