Fiat May Have Proposed Merger with Opel, PSA

Fiat CEO Sergio Marchionne approached General Motors and PSA Peugeot Citroen earlier this month about a three-way equity merger that would include GM's Opel unit, Bloomberg reports.

The news service, which cites three unidentified sources, says Fiat offered PSA stock in the combined entity and agreed to include Opel if GM contributed $5 billion-$7 billion (€3.9 billion-€5.4 billion) to restructure that business.

Marchionne dismisses the report. He tells analysts and reporters he hasn't discussed Opel with GM since his unsuccessful bid for the unit in 2009.

Marchionne says he meets regularly with PSA executives and Peugeot family members because of historical ties. Without elaborating on those conversations, he adds, "Don't read anything into having coffee."

Milan-based newspaper Il Sole 24 Ore said early this month that Fiat was interested in buying Opel. The Italian company denied the report. GM declared that Opel is not for sale.

Bloomberg says PSA dismissed Marchionne's proposal because the company favors its alliance with GM. The duo agreed in February to cooperate on logistics, purchasing and product development. GM took a 7% stake in PSA.

Fiat seeks to avoid being isolated in Europe, according to Bloomberg. It says Marchionne suggested a pan-European merger could leapfrog powerhouse Volkswagen AG to become the region's largest automaker. The three companies would have combined market share of 25% vs. the VW group's 24.8%.