Fiat Chrysler moving ahead with French automaker merger
Merger talks continue as FCA faces a federal racketeering lawsuit filed by competitor GM
Fox Business Briefs: Fiat Chrysler merging with Peugeot owner to create one of the world's largest auto makers by volume with a market value of $48 billion; Ford reaches tentative deal with the United Auto Workers Union to avoid a strike.
Fiat Chrysler Automobiles is moving ahead with its $50 billion merger with French auto company PSA Group as roughly 50 people work to finalize a 50/50 deal, according to an internal document detailed by The Wall Street Journal.
FCA and PSA Group, which makes Peugeot, are continuing with the merger even as FCA faces a federal racketeering lawsuit filed by competitor General Motors. The suit is not expected to negatively impact the deal, people on both sides of the talks said according to The Journal.
In this Feb. 14, 2019, file photo, the Fiat logo is mounted on a 2019 500 L on display at the 2019 Pittsburgh International Auto Show in Pittsburgh. (AP Photo/Gene J. Puskar, File) (Associated Press)
FCA and PSA Group updated their employees last week that the two sides were working toward a memorandum of understanding in a message obtained by The Journal. The message described a memorandum of understanding as "the formal document that signals the willingness of both companies to work together to create a 50/50 merger."
FCA executive Doug Ostermann and PSA executive Olivier Bourges are leading the respective negotiating teams. They're expected to clinch the deal by the end of 2020 to create a company that will rival Europe's biggest automaker Volkswagen AG, The Journal reported.
AUTO WORKERS, FIAT CHRYSLER REACH TENTATIVE CONTRACT WITH $9K SIGNING BONUS
Unions representing PSA employees have signaled support for the deal, according to The Journal.
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The United Auto Workers and FCA reached a tentative agreement Saturday on a new four-year contract, which includes a total of $9 billion in investments but still needs final approval from workers.
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The merger may be complicated by an ongoing federal bribery and embezzlement investigation into some of the UAW's leadership, which started at FCA. Many workers at the company have been suspicious of the union’s leadership since the scandal became public in 2017.
Union President Gary Jones, whose home was raided by federal agents, resigned in November, and Vice President Rory Gamble is now acting president.
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FOX Business' inquiries to FCA and PSA Group were not immediately returned.