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Fiat-Citroen merger?

4th October 1968, Page 40
4th October 1968
Page 40
Page 40, 4th October 1968 — Fiat-Citroen merger?
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Which of the following most accurately describes the problem?

• Confirmation was expected this week of a merger deal between Fiat of Italy and Citroen of France, with reluctant approval by the French Government. It was thought that the merger would be achieved by Fiat acquiring a 30 per cent interest in Citroen. this 30 per cent to come out of the 53 per cent Michelin holding in Citroen. This would leave the remaining 47 per cent of Citroen in the hands of other stockholders —mainly French institutions and bornmercial inta-ests—but would give Fiat /Michelin a majority.

There has also been speculation that the Citroen-Fiat move would mean Citroen severing its recent agreement with Berliet, since Berliet and Fiat heavy vehicles are directly competitive in several weight classes. There is also the point that Fiat and Berliet together would be much stronger in the heavy-vehicle field than Saviem, which is French Government controlled. Meanwhile, recurrent rumours that Fiat has been negotiating to buy Lancia now seem to have real substance; in return, Fiat may offer Lancia's owners control of a company in another field—possibly Cementi Marchino.

Citroen has been having a difficult time financially in recent years, and is said to have overdrafts of around £10m.

If the merger goes through, all sorts of further arrangements could conceivably flow from it. For example, Fiat is already linked with Chrysler through Simca, and

Chrysler controls Rootes (Cornmer /Karrier /Dodge).

The Fiat-Citroen move, if confirmed, will certainly give strong backing to those who asserted that the Leyland-BMC merger was necessary to provide the strength to face other big international groups in the rapidly rationalizing motor industry.

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Organisations: French Government

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