Fiat, Peugeot-Citroen Eye Merger

Fiat CEO Sergio Marchionne said last week that the Italian company may not survive the current economic downturn without a partner, and it seems he may have found that partner already. According to Italian newspaper Milan Finanza, sources close to Italian Prime Minister Silvio Berlusconi’s office say Berlusconi and French President Nicolas Sarkozy have discussed a possible tie-up between Fiat and Peugeot-Citroen.

Analysts have said the two companies could work well together, as they both have strong positions in the small-car market and already have two joint ventures in commercial vehicles and minivans. Combined, the two companies would be the fourth largest automaker by production on par with Volkswagen and Renault-Nissan, following Toyota, GM, and Ford. The two companies sold 6.2 million units combined last year.

Spokesmen for the companies had no immediate comments, and a spokesman for Berlusconi’s office said there was no official comment on the report. It is speculated that the tie-up will be discussed on Wednesday, when the chairman of IFI-the holding company which happens to be Fiat’s controlling shareholder-is scheduled to meet with Berlusconi.

Source: Reuters