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Fiat Chrysler and Peugeot to merge in giant auto deal

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Market summary:

Maltese market closed in red on Wednesday, with MSE total index ending the session 0.100% lower to 9,384.988 points. Best performer was Bank of Valletta plc. It added 0.49% to close at 1.025, followed by 0.40% jump of MIDI plc with closing price 0.50. Biggest fall, of 3.23% was seen from Trident Estates plc which closed at 1.50. Followed by Malta Properties Company plc and Malita Investment plc, both fell 3.08% and 2.70% to close at 0.63 and 0.90 respectively.

European shares inched lower on Wednesday on worries over a potentially hard Brexit, while gains in defensive sectors capped losses. The main STOXX 600 index was 0.13% lower for the day. German stocks dropped about 0.5%, despite a survey showing that the country’s business morale rose more than expected in December to hit a six-month high.

US stocks turned in a mixed performance on Wednesday as investors eyed impeachment proceedings and continued to mull over Sino-US trade developments. At the close, the Dow Jones Industrial Average was down 0.10% at 28,239.28, while the S&P 500 was 0.04% lower at 3,191.14 and the Nasdaq Composite was 0.05% higher at 8,827.73.

Fiat Chrysler-Peugeot merger could bring more clean vehicles.

Fiat Chrysler and Peugeot agreed Wednesday to merge into a single company that will become the world’s fourth-largest automaker, a giant that could bring consumers a wider variety of cleaner vehicles at a faster pace, including more powered by electricity.

The boards of the two companies signed the deal to achieve what neither was good at alone: conquering the challenges of stricter emission rules and navigating the transition to battery-powered and autonomous vehicles.

The new company, which doesn’t yet have a name, will be led by Peugeot’s cost-cutting CEO Carlos Tavares. Fiat Chrysler CEO Mike Manley will stay on, though it was unclear in what capacity and for how long.

For consumers, the agreement will give Fiat Chrysler access to “multi-energy platforms” already developed by Peugeot, including electric vehicles, Manley said.

But don’t expect to see Peugeot sedans in the U.S. anytime soon. Tavares said the combined company’s brands would stay where they originated.

The deal, long sought by both corporations, is expected to close within 15 months, although it will have to clear anti-trust and other regulatory hurdles.

This article was issued by Nadiia Grech, Junior Trader at Calamatta Cuschieri. For more information visit, https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.