News of a possible merger or even a full acquisition between Fiat Chrysler (FCA) and Peugeot has now resulted in both companies' shares soaring in Europe's STOXX 600. The rumors were initially spread following the statement that was made by the president of the Peugeot family holding company FPP, Robert Peugeot, to French reporters. During an interview, Peugeot's head stated that he was open to a possible deal with Fiat Chrysler as well as other options that would benefit the company.
Reporters had asked the French automotive manufacturer's head what he thought about possible acquisitions and mergers with FCA. He simply replied that he was open to an FCA deal or a deal with other companies for that matter. He also told reporters that he would not stand in the way of a deal if the PSA should want to pursue it with the FCA. Peugeot's statement came right after the PSA had successfully acquired Open in 2017, he also mentioned that fact and told reporters that he was open to more opportunities like it.
Following the spread of the news, share prices for FCA rose by 5.2 percent, while Peugeot shares rose by 2.7 percent. The overall growth from both companies helped boost Europe's auto index, which saw an increase of 2.5 percent overall.
Aside from a possible merger or acquisition with FCA, Groupe PSA's CEO Carlos Tavares also previously mentioned that the company was open to deals with companies such as General Motors, Jaguar Land Rover, and Fiat. Tavares cited that these companies were ideal partners in its plans to further expand their companies reach. Groupe PSA currently owns and operates popular European automotive brands and such as Citroen, Open, Vauxhall, and Peugeot.
FCA CEO Mike Manley was previously quoted in saying that his company was open to making alliances and deals that would help ensure the company's future strength. Manley took over the company as its head following the death of Sergio Marchionne last year. FCA is currently the go-to target for most other automotive manufacturers given its strong presence and exposure in the North American market. This is mainly thanks to its popular brands such as Ram, Jeep, and Maserati.
According to analysts, a merger or an acquisition would make a lot of sense given that Groupe PSA is essentially a Europe-only player. Around 90 percent of the vehicles the company produces is sold in Europe. If it partners with FCA, the company could greatly extend its global reach, which would include North America.
