FCA To Merge With PSA

[thomasmnile]

The French Ram is at hand???

[colliehauler]

philh wrote:

ShinerBock wrote:

That is not how it works. The CEO cannot override the board of directors. Board members are elected by shareholders(owners of the corp) to act on behalf of the shareholders.

Spot On

The Board members are responsible to the shareholders. Their primary responsibility is to increase shareholder wealth, not protect FCA or PSA.

I would not be surprised to see Jeep spun off, but I don't know who would buy jeep brand.

Chrysler will be a mere shadow in a decade.

Fiduciary responsibility

[philh]

ShinerBock wrote:

That is not how it works. The CEO cannot override the board of directors. Board members are elected by shareholders(owners of the corp) to act on behalf of the shareholders.

Spot On

The Board members are responsible to the shareholders. Their primary responsibility is to increase shareholder wealth, not protect FCA or PSA.

I would not be surprised to see Jeep spun off, but I don't know who would buy jeep brand.

Chrysler will be a mere shadow in a decade.

[ShinerBock]

RobertRyan wrote:

RobertRyan wrote:

MUNICH (Reuters) - Volkswagen (VOWG_p.DE) is open to buying a majority stake in U.S. truckmaker Navistar “at some point,” it said on Monday, as the German automaker prepares its trucks business for a possible stock market listing that could help raise funds to expand.Volkswagen Truck & Bus acquired a 16.9 percent stake in Navistar International Corp (NAV.N) in 2016 and last week joined forces with Toyota’s (7203.T) Hino Motors as it strives to compete more effectively with global truck market leaders Daimler (DAIGn.DE) and Volvo (VOLVb.ST).

Volkswagen (VW) plans to convert its trucks division, which includes the Scania and MAN brands and a Brazil-based commercial vehicles business, into a public limited company as a prelude to a potential stock market listing.

“(Taking over Navistar) would make sense at some point,” Matthias Gruendler, the finance chief of VW truck and bus, told reporters on Monday.

A takeover would require between 3 and 4 billion in extra costs and could be shouldered without proceeds from a possible initial public offering (IPO), he said, without specifying whether he was talking about euros or dollars.

The spinoff of TRATON will, in theory, allow Volkswagen to see earnings multiple expansion and increased valuation on at least a portion of its business.

Volkswagen has long been rumored to have interest in acquiring medium- and heavy-duty truck manufacturer Navistar in which it already holds a 16.8 percent interest (16.6 million shares). The two currently have a “strategic alliance” that provides joint collaboration on engine technology, the sale of engines and contract manufacturing.

Volkswagen’s management has brushed back Navistar acquisition talk in recent weeks, but in 2018 TRATON Chief Executive Officer Andreas Renschler said that an acquisition of Navistar would be a “good idea.”

TRATON reported revenue of 25.9 billion euros in 2018 with truck sales of 233,000 units and is viewed as the market leader in its core markets of Europe and South America. Navistar generated $10.3 billion in revenue during its 2018 fiscal year ending October 2018, representing roughly 14 percent of the U.S. market share. There is very little overlap in geographies currently as North America accounts for only 1.5 percent of TRATON’s vehicle deliveries. Additionally, Navistar’s $3.3 billion market cap is roughly one-quarter of TRATON’s value.

Just because he says he wants to do it, does not mean he can at this time or should. The US heavy duty truck market is very cyclical meaning that it generally has 2-5 good years with lots of truck orders followed by 1-3 bad years. We are just coming our of a 5 year boom meaning Navistar's shares are high. This means their value is high which means it will cost more for VW to purchase them.

If VW were smart, they would wait at least a few years for the Navistar value to drop and then acquire more assets into Navistar. It would probably take a few more cycles for it to be a full acquisition. This is what VW did on the last bust in the heavy duty market when they bought around 16% of the shares of Navistar several years ago. This is why we hear that VW has no current plans to acquire Navistar and will likely wait a few years when their value goes down.

It would be foolish of VW or any investor to purchase when values are high and are historically at their peak when they can wait just a few years for the value to drop.

[ShinerBock]

RobertRyan wrote:

In this scenario, FCA actually have more leverage because they have more board representation with the 11 member being John Elkann from FCA as chairman of the board. The board can hire or fire a CEO while the CEO cannot touch a board member. The board can also override the CEO if they have enough votes to do so. So FCA will have 6 votes on the board to PSA's 5. The CEO is from PSA who does not have a vote which means FCA can out vote PSA on anything they wish to. So saying that PSA will dominate the company is highly unlikely unless PSA gets one of the FCA board meers to vote against FCA.

No they do not have more leverage in a merged company. Carlos Tavares will be the CEO, not John Elkhann, the board will make recommendations but he can veto them as the CEO

That is not how it works. The CEO cannot override the board of directors. Board members are elected by shareholders(owners of the corp) to act on behalf of the shareholders. They are essentially the boss of the CEO and the rest of the senior executives dictating their employment and compensation. The only way a CEO can be fired is by the board. The only time a CEO has any say in this matter is if he is chairman of the board, which is not the case in this situation, or if he has enough shares.

Board of Directors (B of D)

[RobertRyan]

RobertRyan wrote:

MUNICH (Reuters) - Volkswagen (VOWG_p.DE) is open to buying a majority stake in U.S. truckmaker Navistar “at some point,” it said on Monday, as the German automaker prepares its trucks business for a possible stock market listing that could help raise funds to expand.Volkswagen Truck & Bus acquired a 16.9 percent stake in Navistar International Corp (NAV.N) in 2016 and last week joined forces with Toyota’s (7203.T) Hino Motors as it strives to compete more effectively with global truck market leaders Daimler (DAIGn.DE) and Volvo (VOLVb.ST).

Volkswagen (VW) plans to convert its trucks division, which includes the Scania and MAN brands and a Brazil-based commercial vehicles business, into a public limited company as a prelude to a potential stock market listing.

“(Taking over Navistar) would make sense at some point,” Matthias Gruendler, the finance chief of VW truck and bus, told reporters on Monday.

A takeover would require between 3 and 4 billion in extra costs and could be shouldered without proceeds from a possible initial public offering (IPO), he said, without specifying whether he was talking about euros or dollars.

The spinoff of TRATON will, in theory, allow Volkswagen to see earnings multiple expansion and increased valuation on at least a portion of its business.

Volkswagen has long been rumored to have interest in acquiring medium- and heavy-duty truck manufacturer Navistar in which it already holds a 16.8 percent interest (16.6 million shares). The two currently have a “strategic alliance” that provides joint collaboration on engine technology, the sale of engines and contract manufacturing.

Volkswagen’s management has brushed back Navistar acquisition talk in recent weeks, but in 2018 TRATON Chief Executive Officer Andreas Renschler said that an acquisition of Navistar would be a “good idea.”

TRATON reported revenue of 25.9 billion euros in 2018 with truck sales of 233,000 units and is viewed as the market leader in its core markets of Europe and South America. Navistar generated $10.3 billion in revenue during its 2018 fiscal year ending October 2018, representing roughly 14 percent of the U.S. market share. There is very little overlap in geographies currently as North America accounts for only 1.5 percent of TRATON’s vehicle deliveries. Additionally, Navistar’s $3.3 billion market cap is roughly one-quarter of TRATON’s value.

[RobertRyan]

In this scenario, FCA actually have more leverage because they have more board representation with the 11 member being John Elkann from FCA as chairman of the board. The board can hire or fire a CEO while the CEO cannot touch a board member. The board can also override the CEO if they have enough votes to do so. So FCA will have 6 votes on the board to PSA's 5. The CEO is from PSA who does not have a vote which means FCA can out vote PSA on anything they wish to. So saying that PSA will dominate the company is highly unlikely unless PSA gets one of the FCA board meers to vote against FCA.

No they do not have more leverage in a merged company. Carlos Tavares will be the CEO, not John Elkhann, the board will make recommendations but he can veto them as the CEO

FishOneOne wrote:
suspect the CEO will fill the 11th spot or someone at the parent company, and if this report is correct with Carlos Tavares being the new company CEO it looks like PSA will eventually dominate the company.

The way I see it as well. Especially when it gets to deciding on BEV's and advanced Diesel technology

[RobertRyan]

MUNICH (Reuters) - Volkswagen (VOWG_p.DE) is open to buying a majority stake in U.S. truckmaker Navistar “at some point,” it said on Monday, as the German automaker prepares its trucks business for a possible stock market listing that could help raise funds to expand.Volkswagen Truck & Bus acquired a 16.9 percent stake in Navistar International Corp (NAV.N) in 2016 and last week joined forces with Toyota’s (7203.T) Hino Motors as it strives to compete more effectively with global truck market leaders Daimler (DAIGn.DE) and Volvo (VOLVb.ST).

Volkswagen (VW) plans to convert its trucks division, which includes the Scania and MAN brands and a Brazil-based commercial vehicles business, into a public limited company as a prelude to a potential stock market listing.

“(Taking over Navistar) would make sense at some point,” Matthias Gruendler, the finance chief of VW truck and bus, told reporters on Monday.

A takeover would require between 3 and 4 billion in extra costs and could be shouldered without proceeds from a possible initial public offering (IPO), he said, without specifying whether he was talking about euros or dollars.

[RobertRyan]

Ksss wrote:
Why would IH be relying on Scania expertise? The time to buy out IH would be when the economy was/is poor or right after their engine debacle when they picked a fight with the EPA over SCR. They are getting stronger IE more expensive.

No not exactly great global conditions to try and buy Navistar. VW Trucks are now called the Traton group. . They will eventually buy Navistar

[RobertRyan]

Wilbur 1 wrote:
And Scania and MAN are part of Volkswagen Group.

Correct

[ksss]

RobertRyan wrote:
Not the only European incursion into the North American Automotive Scene recently
Navistar showed Scania Light Quarry Trucks to be used in the Canadian Mining Industry
Navistar is relying a fair bit on Scania expertise.
Just to remind you Scania and MAN do have an agenda to buy Navistar outright when Global conditions improve.

Why would IH be relying on Scania expertise? The time to buy out IH would be when the economy was/is poor or right after their engine debacle when they picked a fight with the EPA over SCR. They are getting stronger IE more expensive.

[ShinerBock]

wilber1 wrote:

RobertRyan wrote:
Not the only European incursion into the North American Automotive Scene recently
Navistar showed Scania Light Quarry Trucks to be used in the Canadian Mining Industry
Navistar is relying a fair bit on Scania expertise.
Just to remind you Scania and MAN do have an agenda to buy Navistar outright when Global conditions improve.

And Scania and MAN are part of Volkswagen Group.

What he is saying is not totally true.

My company is the largest Navistar dealership group in the world and we meet with many of their corporate teams on a regular basis. VW group, which is the parent company of Scania and Man as you say, owns over 20% of the shares in Navistar and they have agreed to share tech and assets. There have been no future plans as of yet to take over Navistar. I do not think VW group can afford a total acquisition yet either. VW is also using Navistar to enter into the North American market with their brands and models that Navistar does not offer a competitive truck for.

[ShinerBock]

FishOnOne wrote:
Again in reality there never is equals... It may be reported that how it's going to be structured but it won't last.

Is this fact or opinion. If fact, then please show me the data you have that you know it won't last

FishOnOne wrote:
Here's a copy/paste: The companies would combine under a Dutch parent company, with a board of 11 members, five nominated by FCA and five by PSA. Carlos Tavares, CEO of PSA Groupe, would be CEO of the new company; FCA Chairman John Elkann would retain his role.

I suspect the CEO will fill the 11th spot or someone at the parent company, and if this report is correct with Carlos Tavares being the new company CEO it looks like PSA will eventually dominate the company.

In this scenario, FCA actually have more leverage because they have more board representation with the 11 member being John Elkann from FCA as chairman of the board. The board can hire or fire a CEO while the CEO cannot touch a board member. The board can also override the CEO if they have enough votes to do so. So FCA will have 6 votes on the board to PSA's 5. The CEO is from PSA who does not have a vote which means FCA can out vote PSA on anything they wish to. So saying that PSA will dominate the company is highly unlikely unless PSA gets one of the FCA board members to vote against FCA.

[wilber1]

RobertRyan wrote:
Not the only European incursion into the North American Automotive Scene recently
Navistar showed Scania Light Quarry Trucks to be used in the Canadian Mining Industry
Navistar is relying a fair bit on Scania expertise.
Just to remind you Scania and MAN do have an agenda to buy Navistar outright when Global conditions improve.

And Scania and MAN are part of Volkswagen Group.

[RobertRyan]

Not the only European incursion into the North American Automotive Scene recently
Navistar showed Scania Light Quarry Trucks to be used in the Canadian Mining Industry
Navistar is relying a fair bit on Scania expertise.
Just to remind you Scania and MAN do have an agenda to buy Navistar outright when Global conditions improve.

[RobertRyan]

philh wrote:
I don't know much about PSA, but I do know that FCA is way behind in product development of BEV and hybrids. They have been milking the high horsepower revenue without much new development. Jeep is a valuable commodity. Trucks are doing well. Cars not so much.

That is one reason they want this " marriage" PSA is much more advanced in BEV tech and oddly diesel technology