It’s been a while, hasn’t it? A lot has happened, but we’re back! On to the latest intriguing development, then! Move over GM and Volkswagen, there’s a new automaker giant in town. Or there will be, once, Fiat Chrysler Automobiles and Peugeot’s Groupe PSA finalize the deal worth EUR 40 bln. What will that entail, then?

Well, at a glance, the new merger will make a 50/50 tie-up that can shift more than 8 million cars per annum. That’s a lot of vehicles! With revenues topping EUR 170 bn, a deal like that will not only create more momentum for both brands, but actually allow to expand without closing any factories – AND generate additional benefits north of EUR 3.7 bn. And the fact that this will create the world’s fourth largest car company is no small feat, too.

There are still some worries in the UK about the deal’s possible outcomes for factories located in Britain, such as the one in Cheshire and another in Bedfordshire, but the executives of both companies (soon to be just one company) are confident no job losses will occur.

The restructuring will put current CEO of PSA, Carlos Tavares, at a parallel position in the newly merged company, while current chair of Fiat John Elkann will become the chair of the new conglomerate.

The deal does come as a bit of surprise, though, considering just a while back similar deal with Renault was axed in view of government involvement. Notably, PSA is also partly owned by state due to a 2014 bailout that made the government a minority (12%) shareholder. Nevertheless, the deal makes a lot of sense to industry analysts. Erik Gordon from Ross School of Business points to the two areas in which both giants were so far lagging behind: safety features and electric cars. In an industry all but dominated by hybrids and electric cars this may seem like an oversight, yet European car market is so stagnant it can be reinvigorated even by a large merger like that. The biggest issue facing the merger now is that neither brand is strong in China, currently one of the most important markets to capture if you’re a car manufacturer.

PSA gives Fiat a much-needed boost in terms of meeting EU’s stringent carbon dioxide emissions that will be the official norm next year.

What the merger means for the car owners in general is probably a greater synthesis of strengths of either of the brands. But, perhaps more importantly, now such diverse car makes as Lancia, Fiat, Jeep, Chrysler, Vauxhall, Peugeot, Citroen and even Maserati will all be made under one roof.

That roof, of course, will now be located (at least business-wise) in Netherlands, as the new company will be incorporated there. It will still be traded on stock exchanges from Paris to New York. Both boards of the companies voted unanimously in favour of the merger, stating they „Both share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to capture successfully the opportunities and manage effectively the challenges of the new era in mobility.”

We’ll have to just see if there is a new electric Fiat coming our way sometime soon, then!

 

VOCABULARY

move over… – ustąpcie, zróbcie miejsce (dla kogoś)
giant – gigant
to entail sth – pociągać coś za sobą
at a glance – na pierwszy rzut oka
merger – fuzja, połączenie przedsiębiorstw
tie-up – połączenie, powiązanie
to shift – sprzedać, spylić
per annum – rocznie
vehicle – pojazd
revenues – przychody
to top X – przewyższyć X
momentum – tu: rozmach, rozpęd
to expand – rozszerzać się
factory – fabryka
benefits – korzyści
north of X – powyżej X (pot.)
feat – wyczyn
outcome – wynik, rezultat
executive – dyrektor, menadżer wyższego szczebla
confident – pewny
job losses – zwolnienia
CEO (Chief Executive Officer) – dyrektor naczelny
chair – prezes
conglomerate – konglomerat
to axe sth – zamknąć coś, obciąć
in view of sth – ze względu na coś
notably – w szczególności
partly owned – częściowo posiadany/we własności
state – tu: rząd, państwo
due to – z powodu
bailout – pakiet pomocy, zapomoga finansowa (przekazywana przez państwo spółce)
minority shareholder – udziałowiec mniejszościowy
nevertheless – mimo to
to point to sth – wskazać na coś
to lag behind – pozostawać w tyle
safety features – funkcje bezpieczeństwa
to dominate – dominować
oversight – przeoczenie
stagnant – w stagnacji
to reinvigorate sth – odżywić coś
to capture sth – schwytać coś
manufacturer – producent
boost – bodziec pobudzający, wzmocnienie
in terms of X – pod kątem X, od strony X
stringent – surowy, ostry
carbon dioxide – dwutlenek węgla
synthesis – synteza
diverse – różnorodny
make – marka
X-wise – od strony X
to incorporate sth – zarejestrować spółkę, nadać osobowość prawną
stock exchange – giełda papierów wartościowych
board – rada nadzorcza
unanimously – jednogłośnie
in favour of sth – za czymś, na korzyść czegoś
conviction – przekonanie
compelling – przekonujący
bold – odważny
decisive – decydujący, rozstrzygający
capabilities – zdolności, możliwości
challenge – wyzwanie

by Prochor Aniszczuk

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