Last Updated on November 4, 2022 by SogouAuto
Risks Associated with the Proposed Merger
One of the biggest risks associated with the proposed merger is that it could lead to job losses. Fiat and Peugeot Citroën are both struggling companies who have been forced to make significant cuts to their workforces in recent years. If the two companies were to merge, it’s likely that even more jobs would be lost as duplicative positions were eliminated. This could lead to political backlash in both France and Italy, where the combined company would have a major presence.
Another risk is that the combined company could end up being too reliant on China for sales. Currently, about one-third of Fiat’s sales come from China. However, China’s economy has been slowing down in recent years, and there’s no telling how long that trend will continue. If the Chinese market were to contract significantly, it could have a major negative impact on Fiat’s bottom line.
Finally, there’s also the risk that the merger simply won’t work out as planned. Mergers are notoriously difficult to execute successfully, and often result in disappointing results for shareholders. Given all of these risks, it’s important for investors to carefully consider whether or not a merger between Fiat and Peugeot Citroën is really in their best interests.