France: FCA-PSA Merger “an Opportunity to Grab”

Bill Hampton

French Prime Minister Edouard Philippe says there are “excellent arguments” in favor of the proposed merger between PSA Group and Fiat Chrysler Automobiles NV.

An enthusiastic Philippe tells Bloomberg News that the plan appears to be “an opportunity to grab.”

An endorsement by the state, which owns 12% of PSA, is critical to a successful deal. The government’s bullish position contrasts with its heavy hand in the failed merger between FCA and Renault SA, in which France holds a 15% stake.

The FCA-Renault talks quickly collapsed in June after France insisted that Renault win backing for the would-be merger from Nissan Motor Co., the carmaker’s alliance partner for 20 years. Reports said the state also demanded job guarantees and a continued strong voice in business decisions made by the merged carmakers.

FCA perceived the government’s position as meddling and withdraw its bid nine days after presenting it. The company cited unfavorable “political conditions” in France.

Bloomberg says the government appears chastened by the FCA-Renault debacle. Phillippe tells the news service that France will be “sensitive” about protecting the country’s industrial base in a PSA-FCA merger. But he did not say the country would demand job guarantees.