FCA, PSA Revive Merger Talks

Fiat Chrysler Automobiles NV and PSA Group are again in exploratory talks about merging, sources tell The Wall Street Journal.

Such a combination would create a $46 billion carmaking giant with especially strong bases in North America and Europe. The boards of both companies are holding special meetings today, according to the newspaper’s sources.

Under one scenario, the two carmakers would combine their shares in a merger of equals, the Journal says. The resulting entity would be chaired by FCA Chairman Elkann. PSA chief Carlos Tavares would become CEO of the merged companies.

This is the second round of merger talks between the two companies this year. PSA initiated a similar discussion with FCA early this year. But Elkann reportedly was unhappy about the terms and rejected the overture.

In June, FCA instead proposed to merge with Renault. The company also demanded a quick decision by the French carmaker’s board whether to proceed with detailed talks.

When Renault balked, FCA abruptly withdrew the offer a week later. FCA complained that the French government—which owns 15% of Renault—was impeding the deal with 11th-hour demands.

Last week Renault Chairman Jean-Dominique Senard ruled out reviving talks with FCA. Instead, he declares his priority is to repair the company’s ailing, 20-year-old alliance with Nissan Motor Co.