|Bid||15.57 x 1300|
|Ask||15.58 x 4000|
|Day's Range||15.52 - 15.73|
|52 Week Range||12.11 - 17.46|
|Beta (3Y Monthly)||2.18|
|PE Ratio (TTM)||6.72|
|Forward Dividend & Yield||0.73 (4.65%)|
|1y Target Est||16.71|
(Bloomberg Opinion) -- If you’ve dropped the kids off at school in London or the New York suburbs recently, the idea that Jaguar Land Rover Automotive Plc is struggling must seem far-fetched. The British carmaker’s Range Rover SUVs have become a common feature of the upper-middle class lifestyle. How else would one get to brunch and the gym?Yet a decade after India’s Tata Group acquired and dramatically reinvigorated these famous old brands, JLR is back on the ropes. The unit lost an eye-peeling 3.3 billion pounds ($4.2 billion) in the fiscal year to March and burned through 1.3 billion pounds of cash. No wonder Tata is casting around for help.JLR’s cost-base has become bloated, its sales in China have collapsed and its big bet on Jaguar saloon (sedan) models has failed to pay off. Selling SUVs to Brits and Americans has prevented its fall from being even more dramatic. However, new gasoline and diesel cars are going to be banned in the U.K. and elsewhere by 2040 and the climate crisis could trigger a backlash against gas-guzzlers well before then. Either way, refashioning the company for a zero-emissions future will be very expensive.Tata insists JLR is not for sale but that doesn’t mean it wants to continue this journey alone. The unit had about 2.2 billion pounds of net debt at the end of September.The Indian parent has approached fellow automakers including China’s Zhejiang Geely Holding Group Co. and Germany’s BMW AG, about forging partnerships to help JLR save money, Bloomberg reported this week. These would supplement existing collaborations with BMW on electric drive systems and with Waymo on autonomous vehicles.This hunt for allies makes sense because JLR’s business model is looking shaky. More than 80% of the vehicles that it sold in Europe last year run on diesel, a technology that’s been undermined by Volkswagen AG’s emissions cheating and the threat of bans in many cities.SUVs make up an even higher percentage of sales. The boom in these vehicles has contributed to a rise in average carbon emissions from carmakers over the past year or two. No wonder they’re in the cross-hairs of climate campaigners. Last month JLR listed “increasing environmental activism” among its biggest challenges.The Extinction Rebellion crowd has a point here. A top-specification Range Rover can weigh more than 5,700 lbs (2,585kg), which is why the company’s vehicles tend to spew out more CO2 than peers.Because it sells less than 300,000 cars annually in Europe, JLR has special dispensation from Brussels to pollute more.(1) However, these lenient fleet emission targets expire in 2028, so the company needs to change its ways sharpish.It says it’s on track to cut emissions by 45% in 2020 compared to 2007 levels, as required by regulators. From next year there will be a hybrid or electric variant of all of its models; and Jaguar’s all-electric I-Pace compact SUV deservedly won car of the year. Creating zero emissions versions of the group’s biggest SUVS will be more difficult, though, because of their hefty weight and poor aerodynamics.Footing the bill will be a stretch too. The company has to manage a 4 billion pound yearly investment budget while selling far fewer cars than its bigger rivals: JLR sold less than 600,000 vehicles last year, about 5% of Volkswagen’s haul. Lackluster sales have left it with unused production capacity.Its attention to detail in manufacturing has also been found wanting. The Jaguar and Land Rover brands came bottom in J.D. Power’s U.S. new vehicle quality rankings, and high warranty costs are an unwelcome feature of its earnings. All of this means JLR’s profit margins are thinner than you might expect given the $210,000 price tag of a high-spec Range Rover.Even as far out as 2023, JLR anticipates an operating return on sales of 6% at most. This is similar to Daimler AG’s 2022 target for Mercedes-Benz, but is way below the margins of French mass-market carmaker Peugeot SA.Thanks to progress on cost-cutting and signs that plunging China sales have bottomed out, investors have become more confident in Tata’s ability to turn JLR around. It returned to profit in the second quarter, prompting a rally in Tata Motors’ shares and JLR’s beaten up bonds. President Donald Trump’s threat of a 25% U.S. tariff on imported vehicles appears to have receded somewhat, as has the likelihood of a no-deal Brexit that would have been ruinous for carmakers.Might this moment of calm tempt a buyer of the company out of the shadows? Tata’s reluctance to sell isn’t the only barrier. Peugeot was rumored to be keen but its chief executive officer Carlos Tavares has found another merger partner in Fiat Chrysler Automobiles NV. Bernstein analyst Max Warburton says BMW would fit but the Bavarians lost a lot of money when they owned Rover in the 1990s.There are also politics to consider. The backlash against SUVs, many built by BMW, is acute in Germany. Doubling down on gas-guzzling urban tractors might harm BMW’s emissions footprint.(2) It might also be viewed poorly by the Berlin government, which boosted electric vehicle subsidies recently.While SUVs can carry lots of baggage, increasingly it’s the wrong kind.(1) JLR's new cars must have average emissions of about 130 g/km of CO2 by 2021, compared to an industry average of 95g.(2) Depending on what happened to JLR's emissions derogationTo contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The Zacks Analyst Blog Highlights: Toyota Motor, Fiat Chrysler, General Motors, Ford, LKQ and BorgWarner
PARIS/TURIN, Italy (Reuters) - Peugeot maker PSA Group and Fiat Chrysler would retain all of their car brands if their planned $50 billion merger goes ahead, the would-be chief executive of the combined group said on Friday. PSA CEO Carlos Tavares, seen as the architect of PSA's turnaround and in line to take the operational helm in the Fiat tie-up, said in a TV interview that the companies complemented each other well geographically and in terms of technology and brands. FCA derives 66% of its revenue from North America compared with only 5.7% for PSA, Refinitiv Eikon data shows.
While the proposed tie-up between Fiat-Chrysler (FCAU) and PSA is likely to lead to the creation of the world's fourth-largest carmaker, UAW-Ford (F) deal largely mirrors the UAW-General Motors contract.
S&P places FCA N.V. on CreditWatch Positive S&P Global Ratings communicated yesterday that it has placed FCA N.V.’s long and short-term ratings (BB+/B) on CreditWatch.
Moody’s Investors Service communicated yesterday that it has affirmed the “Ba1” Corporate Family Rating on FCA N.V and the “Ba2” ratings on the senior unsecured instruments issued or guaranteed by FCA N.V and it has improved the outlook to positive from stable.
Fiat Chrysler and Peugeot owner PSA's pledge not to close factories if they merge is likely to come under heavy strain as the combined group would have spare production capacity of almost six million vehicles in a slowing autos market. The companies last week unveiled plans to create a $50 billion (£39 billion) group that would leapfrog Hyundai, General Motors, Ford and Honda to become the world's No.4 automaker, based on their combined 8.7 million vehicles sold last year. The new car and truck making giant would have potential manufacturing capacity of 14 million vehicles, forecasters LMC Automotive told Reuters.
(Bloomberg Opinion) -- The mood music in the car sector is pretty melancholy right now because of Donald Trump’s trade wars and rising technology costs. But Ferrari NV is dancing to a different tune, thanks to its wealthy customers.Revenues rose 9% in the third quarter of 2019 and operating profit jumped 12% year-on-year, the Italian manufacturer reported Monday.Ferrari’s patrons are still ordering new cars despite worries that a recession might be around the corner; many are happy to pay a premium to personalize their vehicle. Ferrari was confident enough to raise its cash flow and profit guidance for 2019. On both metrics it should accomplish this year what it had planned to achieve in 2020. It even announced a more convincing strategy to extend its brand beyond cars, an area where it’s fallen short.The Italian company is making this look easy, but lifting sales while preserving exclusivity is a difficult balancing act in the luxury autos business; just look at the struggles of Aston Martin Lagonda Global Holdings Plc. That company’s shares have dropped 66% this year while Ferrari’s have gained 77%, valuing the prancing horse at more than 28 billion euros ($31 billion). That’s more than its former parent Fiat Chrysler Automobiles NV, which sells as many cars in a day as Ferrari does in a year. Investors would now have to fork out about 41 times estimated earnings to buy Ferrari stock, approaching the exalted 45 times multiple of handbag maker Hermes International. German premium carmaker BMW AG trades on less than 9 times earnings. While this is the very definition of a luxury problem for Ferrari, it still leaves very little room for error.When Ferrari listed its shares in 2015, it implored investors not to think of it as a regular carmaker but rather as a luxury goods company like Hermes. Much of that sales pitch made sense: Ferrari can charge plenty for its cars because customers expect them to hold their value or even increase. Its 25% operating profit margin is much higher than that of other carmakers and should be more resilient. There are waiting lists for some models. Unlike much of the industry, Ferrari sales held up in the last recession.Even so, it has to spend heavily on factory equipment and technology development (including for its struggling Formula 1 racing team). That will always be an impediment to matching Hermes’ operating profit margins, which exceed 35%.The biggest beef with Ferrari’s luxury company aspirations was that its non-car branded products, many produced under licensing agreements, weren’t appealing. What’s the point of a $100 Ferrari polo shirt or $250 wristwatch? Not so long ago you could even buy a Ferrari surfboard. While Ferrari dithered over how to improve things, the brand suffered.On Monday, the company sketched out a plan to slim down its clothing and accessories lines and move them upmarket with the assistance of Giorgio Armani SpA. Meanwhile, it will open driving simulation centers and expand in e-sports to get young customers excited about the brand. Within a decade it hopes these products and services will contribute about 10% of operating profit. That’s still far from certain — brand diversification is notoriously difficult — but the success of the core business leaves room for maneuver.Unlike peers such as Rolls-Royce Motor Cars and Volkswagen AG’s Lamborghini, Ferrari isn’t yet selling high-margin sports utility vehicles. The Italian carmaker’s Purosangue isn’t slated to arrive for a couple more years.But judging by Ferrari’s profit and loss statement, its refreshed product line, including the single-seat Monza SP1 and 812 Superfast, is delivering. Upcoming hybrid models such as the 1,000-horsepower SF90 Stradale supercar should increase confidence that Ferrari has the technical know-how for tougher emissions regulations.Still, it’s surprising that the carmaker seems in no hurry to build a fully electric car. Some caution is natural: An electric Ferrari won’t have the famous engine growl and some Ferrari purists are skeptical, management said on Monday’s investor call. Yet Porsche’s electric Taycan shows sportscar brands can deliver the same excitement with a much smaller carbon footprint. Ferrari proved skeptics wrong once before. It can do so again. To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- A successful merger of Fiat Chrysler Automobiles NV with French carmaker PSA Group could be the ticket for a boost to an investment-grade credit rating.Moody’s Investors Service said Monday it’s bumping its outlook for the Italian-American automaker’s rating up to positive, citing the accord the company reached with PSA last week to create the world’s fourth-biggest car manufacturer. Moody’s rates Fiat Chrysler Ba1, the highest junk grade.“The merger would create a larger and more diversified global auto manufacturer with substantial synergy and efficiency potential, which will help to mitigate multiple challenges within the global automotive manufacturing industry,” Moody’s analyst Falk Frey wrote in a statement. “Its successful execution could result in a rating upgrade for FCA, assuming no further deterioration of the global automotive industry environment in 2020.”The merger would boost Fiat Chrysler’s market share globally, save the company research and production costs and solve its “perceived weakness” in electrification, Frey wrote. He cautioned there are still “significant uncertainties” with regard to clinching the deal.Fitch Ratings boosted Fiat Chrysler to investment grade in November 2018 citing strong cash flows as a result of better profits, less debt and a spinoff of components supplier Magneti Marelli. The automaker is planning to jettison its robotics arm Comau -- worth an estimated 250 million euros ($279 million) -- to shareholders as part of the PSA transaction.S&P Global Ratings also has the highest junk grade on Fiat Chrysler and a positive outlook. If a second firm were to join Fitch in rating the company investment-grade, it would be eligible to join high-grade debt indexes.\--With assistance from Molly Smith.To contact the reporter on this story: Gabrielle Coppola in New York at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Melinda GrenierFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The battle for electric vehicle market dominance is finally getting interesting. The Ford Mach-E's unveiling is scheduled for next weekend, on November 17.
(Bloomberg Opinion) -- Peugeot SA’s equity holders might not think much of its takeover of Italy’s Fiat Chrysler Automobiles NV but bondholders appear to love the idea. Fiat’s credit spreads (the extra yield above the benchmark) have tightened by as much as one-third after news of the deal emerged, accompanying a jump in the company’s share price. Peugeot’s shares fell sharply because of concerns about the premium it would have to pay, but the French company’s credit spreads modestly improved. It’s interesting that Peugeot’s shareholders and bondholders took such different views.One reason is that the European Central Bank is restarting its quantitative easing program, meaning there’s a big new buyer in the euro zone for investment grade corporate bonds. If Peugeot-Fiat becomes reality it will have the right hallmarks to attract Christine Lagarde’s Frankfurt institution. While there’s no firm deal yet, the credit rating agency S&P Global Ratings says the creation of the world’s fourth-biggest carmaker would support Fiat’s debt ratings.However, the ECB could be the real driver for shrinking both companies’ credit spreads. The central bank has just restarted its so-called corporate sector purchasing program as part of the 20 billion euro ($22.3 billion) per month QE bond-buying scheme. According to Mahesh Bhimalingam of Bloomberg Intelligence, there could be about 2.5 billion euros per month of corporate debt purchased.Fiat is already rated BBB- by Fitch Ratings, after being upgraded to investment grade from junk last November. This makes it eligible for inclusion onto the ECB’s list of potential purchases. Peugeot was junk-rated too until recently, but is now a stable BBB- across all the major ratings companies. Both companies were too late to feature in the first round of ECB asset-buying, which snapped up 178 billion euros of corporate bonds.The ECB isn’t going to suddenly build huge holdings in Fiat or Peugeot debt, but it’s logical to assume that it will look to add newly eligible industrial names. On average, the central bank owns about 20% of any holding’s total eligible debt. It doesn’t officially buy bonds to make a profit but it’s common sense to prefer an asset that offers some yield when compared to the negative rates of sovereign debt.Furthermore, as the chart above shows, the ECB likes carmakers. It probably owns up to 75 billion euros of debt in the three German autos giants, Volkswagen AG, Daimler AG and BMW AG. It would be strange indeed then if it didn’t acquire a decent chunk of the bonds in one of Europe’s biggest cross-border industrial combinations. That must put a supportive floor under the Fiat and Peugeot credit spreads.To contact the author of this story: Marcus Ashworth at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Fiat Chrysler and Peugeot owner PSA aim to sign a final merger agreement as early as the beginning of next month, a source familiar with the matter said on Saturday. The two automakers said earlier this week they planned to join forces in a 50-50 share merger to create the world's fourth-largest automaker, seeking scale to cope with costly new technologies and slowing global demand. "This means the final agreement should be signed by early December, or by Christmas at the latest," the source said, confirming a report published earlier on Saturday in La Stampa daily newspaper.
(Bloomberg) -- Just five months after a proposed merger between Fiat Chrysler Automobiles NV and Renault SA fell apart, employees at the Italian-American automaker’s U.S. headquarters in Auburn Hills, Michigan, are once again contemplating the arrival of a new boss.Stock markets were jolted by news this week that Fiat Chrysler and another French suitor, PSA Group, mapped out an agreement to create the world’s fourth-biggest automaker and install Carlos Tavares, PSA’s chief executive officer, to lead the combined company.While younger Chrysler employees may be unnerved, veteran workers were unfazed by the latest in a series of corporate transformations at the company dating back two decades.“This is the fifth time in 20 years this has happened to me,” said Greg Ezyk, an engine-durability technician who works at the U.S. headquarters complex in Auburn Hills outside Detroit. “I don’t get worried.”Most global automakers have gone through their share of buying sprees and spinoffs as the industry weathered cyclical ups and downs. But Chrysler, Detroit’s perennial underdog, has seen more action than most, passing through the hands of Germany’s Daimler AG, private equity firm Cerberus Capital Management LP, the U.S. government and Italy’s Fiat -- and that’s just in the past 21 years.Even the late Sergio Marchionne, who struck a deal with then-President Barack Obama in 2009 to take control of a bankrupt Chrysler and then returned the company to profitability, spent much of his decade-long tenure shopping for deals and preaching the virtues of consolidation.Joining forces with PSA could be a positive for Fiat Chrysler and its upcoming contract negotiations with the United Auto Workers union because it will make the automaker more stable in the long run and better position the company for the rise of electrification, said Marick Masters, a management professor at Wayne State University in Detroit. The UAW will turn its attention to hammering out a deal with the company as long as its tentative agreement with Ford is ratified in the coming weeks.Mergers are such an ingrained part of Chrysler’s culture, Ezyk said, that he’s picked up on tell-tale signs one may be in the works. When Fiat Chrysler started limiting unionized salaried employees like him from working overtime early this year, he viewed it as an attempt to improve the company’s financial results and make it more attractive to a partner or buyer.That’s when the old timers, including me, said ‘Here we go again,’” Ezyk recalled.When Daimler sold a troubled Chrysler to Cerberus in 2007, the private equity firm had clocks yanked from the walls and toilet paper taken out of the bathrooms in Auburn Hills, to save on battery and maintenance costs, Ezyk said.The phrase “merger of equals,” which Fiat Chrysler and PSA used to describe their plan, is usually a sarcastic joke in Auburn Hills referring to the Daimler-Chrysler era, when American employees felt mistreated by German counterparts.It’s taken Chrysler years to rehab its product portfolio from the “Tonka toy” plastic interiors and quality issues that plagued the company when it was cutting costs during the Daimler-Chrysler era, said Mark Kudla, a 29-year Chrysler veteran who retired as a director of product planning in 2017.Kudla is more optimistic about Tavares, whom he worked with on a vehicle platform-sharing project around 2007, when Tavares was leading Nissan Motor Co.’s U.S. operations. Kudla describes Tavares as “brilliant” and a strong personality who didn’t waste time and was eager to get things done.“He’s one of those guys who walk into a room and pick up everything right away,” he said. “Marchionne was brilliant at that, and Tavares sort of rings that same bell to me.”Under the proposed deal terms, Tavares, a French-speaking Portuguese national known for cost-cutting, rally-car driving, and an impressive turnaround of Opel, General Motors Co.’s jettisoned European business, would succeed Mike Manley, who has served in the CEO role for just 15 months.“This has happened to us so many times, we don’t even care anymore,” said Kathy Wittig, an attendance counselor who has worked for Chrysler for 25 years. “It’s just another merger.”\--With assistance from Melinda Grenier.To contact the reporter on this story: Gabrielle Coppola in New York at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Italy's Economy Minster Roberto Gualtieri expressed his appreciation to Fiat Chrysler Chairman John Elkann for a planned merger with France's automaker PSA , government sources said on Friday. In a phone call with Elkann, Gualtieri said he would closely follow the developments of the deal as "a large number of Italian qualified jobs were involved" and as the auto industry was an important source of investments, research and innovation, one of the sources said. Gualtieri said he was confident that the deal would not create job issues in the future, another source said.
(Bloomberg) -- French companies have been on an foreign acquisition tear in recent weeks, offering a rare bright spot for bankers amid a weak global dealmaking environment.Peugeot owner PSA Group announced Thursday it’s in talks to combine with Italian-American rival Fiat Chrysler Automobiles NV, capping the busiest month for acquisitions by French companies in over a decade. Companies in France announced nearly $45 billion of purchases in October, more than double a year earlier, according to data compiled by Bloomberg.While traditionally strong M&A markets like the U.K. face increased uncertainty from upcoming general elections, France has been stable with former banker Emmanuel Macron just halfway through his five-year term as president. French companies have been taking an “offensive approach” to acquisitions, helped by the business-friendly political environment, according to Jean-Baptiste Charlet, co-head of French investment banking at Morgan Stanley.“Large French corporations have lately shown increasing ambition and are eager to develop and grow their presence,” Charlet said. “In most transactions we’ve seen lately, the French party has been the one initiating the deal.”Just this week, luxury giant LVMH made a $14.5 billion offer for American jeweler Tiffany & Co. in what would be the luxury industry’s biggest-ever acquisition. French content producer Banijay Group announced the acquisition of Endemol Shine Group, a Dutch rival backed by Walt Disney Co., in a deal said to be valued at about $2 billion. French capital markets were also busy, with technology services provider Atos SE raising 1.3 billion euros ($1.5 billion) in a placement of Worldline SA shares and a related exchangeable bond sale.“Deal activity is very resilient at the moment in France,” said Cyrille Perard, a managing director at Perella Weinberg Partners, which advised PSA’s board on the Fiat Chrysler deal. “It certainly makes the French M&A market stand out in comparison to other markets in continental Europe.”France’s economy grew faster than expected in the third quarter, and October numbers show a rebound in services and solid consumer sentiment at a time when other European economies are struggling with global trade difficulties. Consumer companies Hermes International and LVMH reported strong results in the latest quarter, helped by Asian sales, while pharmaceutical giant Sanofi beat estimates thanks to strong demand for its eczema treatment.‘Great Environment’“The large corporates in France are still relatively healthy, so globally France remains a strong market for M&A,” Perard said. “The debt market and cash availability remain stronger than ever, with very low interest rates -- which is a great environment for dealmaking.”Tiremaker Michelin and autonomous driving technology supplier Valeo SA both stuck to their annual guidance even as global vehicle markets have turned weaker than expected. Cosmetics maker L’Oreal SA also struck an optimistic tone after its latest results, saying strong demand from Asia and new product launches will help support continued growth next year.Some of the recent transactions were long-awaited deals that finally came to fruition, said Marc Pandraud, vice chairman of investment banking for Europe, the Middle East and Africa at JPMorgan Chase & Co. Consolidation is “very much” needed in the automotive sector, where companies can share capital expenditures and research costs, he said.The need to bulk up will continue to drive French dealmaking, as the country seeks to create national champions in industries that are still fragmented, according to Perella’s Perard.“The focus is no longer on consolidation for growth,” he said. “Big companies in France want to consolidate to be big enough and have the tools in place against macroeconomic changes.”\--With assistance from Eric Pfanner and Michael Hytha.To contact the reporter on this story: Myriam Balezou in London at email@example.comTo contact the editors responsible for this story: Dinesh Nair at firstname.lastname@example.org, Ben Scent, John LauermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The proposed tie-up between Fiat-Chrysler (FCAU) and PSA is likely to lead to the creation of the world's fourth-largest carmaker, with roughly $50 billion of market cap and $190 billion in annual turnover.
U.S. President Donald Trump's administration will look very closely at the planned merger between Fiat Chrysler and Peugeot owner PSA , White House economic adviser Larry Kudlow said on Friday. "We will obviously look at it very, very carefully," Kudlow said on Bloomberg.
On October 31, Fiat Chrysler Automobiles (FCAU) reported its third-quarter earnings results. The company’s revenue fell 1% during the quarter.
Fiat Chrysler and Peugeot owner PSA's merger is unlikely to provide a quick fix to their problems in China, as both companies have long struggled to find the right products at the right price for the world's top car market, analysts say.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.When PSA Group and Fiat Chrysler Automobiles NV pursued Europe’s biggest merger of the year, they turned in large measure to small advisory firms.PSA worked with French boutique Messier Maris & Associés, while its board was advised by Perella Weinberg Partners and the Peugeot family by Zaoui & Co. Fiat used d’Angelin & Co. and Goldman Sachs Group Inc., the sole Wall Street bank in a leading role. The carmaker’s largest shareholder, Exor NV, chose Lazard Ltd. Morgan Stanley said it also advised PSA in an analyst note.Those firms are now poised to split as much as $90 million in advisory fees, according to estimates from Freeman & Co. The deal underlines the increasing trend of big companies leaning on smaller firms for advice when there’s no financing required from large corporate lenders.Three of the advisers would be considered mini-boutiques. Paris-based Messier Maris & Associés, set up in 2010 by ex-Lazard bankers Jean-Marie Messier and Erik Maris, has only five partners. Italian bank Mediobanca SpA bought a controlling stake in the firm this year.Zaoui, which has advised the Peugeot family on several transactions, was created by brothers Michael and Yoel Zaoui, both former bulge-bracket M&A bankers. Benoit d’Angelin, the ex-Lehman Brothers banker who founded the namesake firm in 2016 in London, is behind the almost 20-person shop that advised Fiat. Those are the smaller versions of larger, global boutiques like Perella Weinberg, which has been expanding in France, and Lazard, which has a long history in the country.By combining, Fiat Chrysler and PSA -- the maker of Peugeot and Citroen vehicles -- would create a regional powerhouse to challenge Volkswagen AG. The tie-up would bring together the billionaire Agnelli clan in Italy and the Peugeot family of France as consolidation sweeps through an industry trying to finance major transformation.\--With assistance from Michael Hytha.To contact the reporter on this story: Aaron Kirchfeld in London at email@example.comTo contact the editors responsible for this story: Daniel Hauck at firstname.lastname@example.org, Aaron Kirchfeld, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
PARIS/MILAN (Reuters) - European labour unions have called on Peugeot owner PSA and Fiat Chrysler to avoid job cuts and factory closures as the two major carmakers prepare to tie the knot, underscoring worries about the $50 billion deal as the regional economy falters. As PSA and Fiat Chrysler detailed plans on Thursday to create the world's No. 4 automaker, IG Metall, Germany's largest union by members, said it would seek to preserve the autonomy of the French carmaker's German unit Opel. The two groups have said no plants would be closed and an existing arrangement rules out forced layoffs at Opel, bought by PSA two years ago, until mid-2023.
Tesla is up 31% in October amid market recovery and better-than-expected earnings. However, Wall Street doesn’t seem that excited about the stock.
Some of the numbers impress. A 50 billion dollar group, number 4 in world rankings, is promised from a possible merger between Peugeot maker PSA and Fiat Chrysler. For car workers, others may alarm - with a combined production capacity of 14 million vehicles. The new giant would have spare capacity of almost six million units - according to forecasters LMC Automotive - putting the two carmakers under heavy strain. Though, when the proposed merger was announced - there was a positive response from one union spokesman over PSA's future. (SOUNDBITE) (French) CFTC TRADE UNION REPRESENTATIVE, FREDERIC LEMAYITCH, SAYING: "PSA is still very euro-centric , and this will allow the group to take on new markets. I'm thinking of North America in particular." But carmaking has entered a downturn, and the expense of adapting cars to new emissions rules is forcing manufacturers to - in some cases - cut back on lower-priced models. It could also mean - say analysts - Fiat Chrysler adopting PSA's more efficient engines. Even, possibly, migrating onto PSA's small car platform. All putting question marks over the future of some plants. Talks of synergies had in any case raised alarm bells, said another union spokesman, when he reacted to the merger news. (SOUNDBITE) (French) FO TRADE UNION REPRESENTATIVE, OLIVIER LEFEBVRE, SAYING: "We're talking about 3.7 billion euros, so we can assume some jobs are going to be redundant, in R&D or in production. The management tells us the merger won't happen by shutting down sites, but we remain vigilant." As for where the synergies may happen: Europe is where product lines and investments can be combined, said one analyst. Europe also likely, said LMC, to bear the brunt of any closures.