Fiat-PSA Merger: the Eiffel Plan

The financial crisis does have an interesting effect on all those who are part of the industry, especially on companies fighting on the automotive front. European manufacturers are no exception, even if the trouble they are in, at least at first glance, seems less deep than the pit GM and Chrysler fell in.

Years from now, records will show the truth behind week after week of merger rumors, spin offs, bankruptcy, aid requests and so on. But until then, there is not much to do except account the stories as they happen. In this case, the story of a possible Fiat-PSA merger.

Sergio Marchionne, Fiat CEO, said earlier this week "we will fight like hell" to make money this year. And one of the options he is considering to make his statement stand is an alliance with French group PSA Peugeot Citroen. Although both parties denied any talk of a possible fusion, Fiat's boss did leave room for interpretation: "Everyone talks with everyone."

Financial circles in France even gave a name to the possible joining of forces: the Eiffel plan. According to, Eiffel is not just the name of preliminary talks between the two parties, but a fully drafted merger plan, put together with the assistance of Mediobanca (Italian investment bank) and another strategic consultant.

The Eiffel merger plan will create a giant, with its headquarters in Paris and Marchionne as chief of operations, in return for PSA support for merger costs. Sources from the fund say the merger will not take its toll on the production structure or jobs in Italy.

The financial terms of the agreement are not known, but some speculate there will be a fusion between the activities of Fiat and PSA. Fiat would become a shareholder in PSA, with a stake of 41 to 45 percent.

PSA's take? Without other details, it is hard to know. However, a merger will allow PSA access to the high-level segment of the market, through the Alfa Romeo and Lancia brands.

The official word from Fiat is that they do not plan any other alliances or mergers other than the one proposed to Chrysler, even if "Fiat frequently examines opportunities for agreements of various types which would offer it operational synergies and access to new markets,” as said in statement quoted by Autonews.

PSA on the other hand decided "not to comment on rumors." A spokesman said that even if the idea of a merger is not considered taboo by the company, the timing is not right for such big decisions.

The two companies already have a several year old agreement regarding commercial vehicles. And, as Christian Streiff, PSA CEO said, there are talks on "new engines and other projects with our partners."
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram Twitter
About the author: Daniel Patrascu
Daniel Patrascu profile photo

Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories