After officially announcing it was in talks with Fiat Chrysler Automobiles about a potential merger earlier this week, the Groupe PSA board has approved the tie-up, potentially creating one of the largest automotive/mobility companies in the world.
Exor, the holding company in charge of FCA, met to vote on the tie-up tonight, with an announcement expected to be made later this week, perhaps as early as Thursday.
If approved, the newly created joint venture would be led by Peugeot CEO Carlos Tavares, CNBC reports, while Fiat Chrysler chairman and Agnelli family heir John Elkann would continue in his combined role with the company.
When approached for comment by CNBC, PSA would not elaborate on the ongoing discussions, referring media to a press release issued earlier today that simply said the two companies were engaged in “ongoing discussions aiming at creating one of the world’s leading automotive groups.”
Groupe PSA, based in the Paris suburb of Rueil-Malmaison, controls the Citroën, DS, Opel, Peugeot, and Vauxhall brands. General Motors sold Opel and Vauxhall to Groupe PSA for $2.6 billion in 2017, with the French conglomerate promptly turning the two struggling companies into money-making success stories, raking in nearly $1 billion in profit from them in a little more than a year.
Prior to selling Opel and Vauxhall to PSA, GM had reached an agreement to collaborate with the French company and share vehicle platforms, components and modules. This then resulted in the two companies planning to develop a new line of MPVs with PSA, before GM sold all of its Opel/Vauxhall assets to PSA a couple of years ago.
At the time of the sale, then president of GM, Dan Ammann, said it would allow the company to “sharply focus our resources on higher-return opportunities as we expand our technical and business leadership in the future of mobility.” In other words, the sale was part of GM’s ongoing effort to manufacture and sell fewer cars in favor of focusing on the mobility sector.
However, PSA quickly turned Opel and Vauxhall into successful ventures, cutting overhead costs by restructuring the companies’ respective leadership ladders and simplifying its product lineups. The French company is now working on phasing out the aging GM platforms from Opel and Vauxhall’s lineups in an effort to help it meet emissions. Going forward, the Opel Corsa and Mokka will ride on PSA’s light CMP architecture, while the Adam, Cascada convertible, Karl and Zafira will all be phased out. The only GM-based cars that will remain by the end of this year will be the Astra, which rides on the GM D2 platform, and the Insignia, which rides on the GM E2 platform.