- The merger between Fiat Chrysler and PSA Group will create a $50 billion entity.
- The resulting entity will be the fourth-largest carmaker on earth.
- The French government, which owns a stake in PSA Group, has not raised any objections to the merger.
Shares of Fiat Chrysler Automobiles NV (NYSE: FCAU) surged by nearly 5% in premarket trading to ultimately finish the day up 2.2%. This occurred after reports emerged that the U.S. carmaker was planning to merge with PSA group, the French manufacturer of the Peugeot brand of vehicles.
Ahead of the opening bell, the price of Fiat Chrysler’s stock was up 4.87% at 7:12 AM EDT to hit $15.71 per share. It gave back some of those gains to end the trading session at $15.32.
Fiat Chrysler’s stock price | Source: Yahoo Finance
Based on Wednesday’s closing price of $14.98, the stock is about 14% lower relative to its 2019 high of $17.46 recorded in February.
Respective boards approve the merger
News of the planned merger had broken earlier, with PSA Group’s board being the first to give its approval. The board of Fiat Chrysler gave the green light early Thursday. The proposed merger will bring the two auto manufacturers under a parent company that will be domiciled in the Netherlands.
The 50/50 merger will create the fourth-biggest carmaker by unit sales in the world. Currently, the world’s top-three largest car manufacturers are Volkswagen, Toyota, and the Renault-Nissan-Mitsubishi Alliance. Toyota is the largest in terms of deliveries and market cap.
Some of the car brands that will now come under one roof following the merger include Jeep, Alfa Romeo, Dodge, Maserati, Citroen,