US-Italian Fiat Chrysler is set to merge with Groupe PSA, French owner of subsidiaries such as Peugeot, Citroen and Opel.
The 50-50 merger is yet to have all the details finalised but will ultimately see the two companies become the world´s fourth-largest car company. An agreement between the car manufacturers would create a business with a combined market value of almost $50billion and annual sales of 8.7 million vehicles.
After Wednesday´s announcement of a potential merger, Fiat Chrysler´s shares jumped up by more than 9 per cent in trading.
This is the second attempt at a merger this year on Fiat Chrysler´s behalf after they pulled out of a possible deal with Renault in June. Previous attempts have also included American corporation, General Motor.
The holding company of subsidiaries such as Jeep, Alfa Romeo and Maserati has been considering a merger for years, believing that consolidation in the global industry is needed to cut costs and overcapacity.
Sources informed Reuters, AFP and Wall Street Journal that the merger could be announced as early as Thursday, however, talks remain in the early stages and there is no guarantee of a final deal.
This has caused concerns for the 3,000 employees at British car company, Vauxhall, as they could be susceptible to restructuring. Unions have called for talks with Groupe PSA.
“Merger talks combined with Brexit uncertainty is deeply unsettling for Vauxhall’s UK workforce which is one of the most efficient in Europe,” said Unite national officer Des Quinn.
“The fact remains, merger or not, if PSA wants to use a great British brand like Vauxhall to sell cars and vans in the UK, then it has to make them here in the UK.”