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Fiat has denied reports that it is planning to merge with PSA Peugeot Citroen, after a leaked report suggested that the idea of a merger was due to be presented to the Fiat board.

Italian newspaper Il Sole 24 Ore reported that the merger was being considered by Fiat executives. The proposal was said to outline how the structure of a merged group would work, with the headquarters going to Paris and production remaining in Italy.

Fiat representatives said: “Regarding press reports to...Read the full article

Autocar:

Fiat has denied reports that it is planning to merge with PSA Peugeot Citroen

- merger in the sense of Daimler merging with Chrysler. PSA will effectively be taking over Fiat's auto interests. Does this mean that Peugeot will once again own Chrysler and therefore resurrect Talbot and so on?

horseandcart:

merger in the sense of Daimler merging with Chrysler. PSA will effectively be taking over Fiat's auto interests. Does this mean that Peugeot will once again own Chrysler and therefore resurrect Talbot and so on?

Are you looking to inflict the woe that was Talbot on us all over again Horse!

The leveraged buyout is dead, so where is the money coming from for this takeover?

Orangewheels:

The leveraged buyout is dead, so where is the money coming from for this takeover?

Chaps, here's more text from the Automotive News piece

'Italy's Il Sole 24 Ore newspaper said the Italian investment bank Mediobanca has drawn up a report with a strategic consultant on merging Fiat's automotive operations with those of PSA.

The newspaper said the company resulting from the merger would be headquartered in Paris, with the Italian side accounting for about 41 percent to 45 percent of the shareholding.

Citing financial sources, the newspaper said Fiat CEO Sergio Marchionne is assessing whether and when to present the report to the Fiat board.pr> A Fiat statement said the company's board is not currently considering a merger with another automotive group other than its planned alliance with Chrysler.

“It is a known fact that - as is true for other groups in the sector - Fiat frequently examines opportunities for agreements of various types which would offer it operational synergies and access to new markets,” the statement said.

Fiat and PSA have worked together for more than 20 years on two joint ventures in France and Italy to build large minivans and light commercial vehicles.'

No wonder Fiat's shares went up. No denial of the 'war gaming' strategy paper, the newspaper says Marchionne is thinking about presenting the paper to board, so the statement that 'company's board is not currently considering a merger with another automotive group other than its planned alliance with Chrysler' is a statement of the obvious.

It is Marchionne who has been insisting that no car maker can survive without a minimum 'group' annual production of 5.5m, so my bet is that this paper exists, but that it is only a 'what if' exercise so far.

HiltonH:

It is Marchionne who has been insisting that no car maker can survive without a minimum 'group' annual production of 5.5m, so my bet is that this paper exists, but that it is only a 'what if' exercise so far.

You wrote about this a short while back; well done for highlighting it. Looks to me like the French won't hang around and be gobbled up in this carmageddon; the French seem to have a knack of preserving their envied way of life even when they're patently not the most gifted in the car making skills-set. In a worst case scenario  - an extended slump - it's beginning to look possible that Europe may be left with three major carmakers - a super-French group and two German groups, VW and an other.

horseandcart:

even when they're patently not the most gifted in the car making skills

 

Don't know how you come to that conclusion. Worked there and in Germany for the last 20-odd years and know where the better engineers were and it isn't here. Biggest egos and most talent for not telling the truth maybe.

Dave52:

and know where the better engineers were and it isn't here.

 

Dave, not sure what you mean by 'here'. To back my view that the French are not the best at making automobiles one has to look no further than any number of independent product quality studies and surveys. The French makes, for many years now, are nearly always at or near the bottom in freedom from fault and longer-term car ownership experience. Going back twenty years or so the French car plants never stood out in any internal industry benchmarking exercises for quality, efficiency or cost. It is amazing in many ways that France is still home to two large volume makers, 3 million units plus each. I understand that the French turn out excellent engineers from their highest level educational establishments but there isn't the bulk of technician and lower level trained staff that one finds in Germany, which are just as vital in many ways as the high-blown engineers to the success of a complicated manufacturing business, both for day-to-day production and new product development.