| 3:56 PM EST

PSA Insists Merger with FCA Is on Track

A PSA source tells Reuters the company’s merger with Fiat Chrysler Automobiles is moving ahead in spite of this week’s racketeering lawsuit against FCA by General Motors.
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PSA Group’s proposed $50 billion merger with Fiat Chrysler Automobiles is moving ahead in spite of this week’s racketeering lawsuit against FCA by General Motors, a company source tells Reuters.

PSA has not commented publicly. But a company source tells Reuters that the French carmaker expects to sign a memorandum of understanding with FCA next month.

GM’s lawsuit claims it has suffered billions of dollars in damage caused by FCA paying bribes to gain more favorable labor terms from the United Auto Workers union.

Yesterday FCA Chairman John Elkann rejected those assertions as “meritless.” He reiterates that FCA and PSA expect by the end of December to sign a binding memorandum of understanding to merge.

The two companies confirmed three weeks ago that they were in fast-paced discussions and presented a detailed description of the proposed deal. The merger would create the world’s fourth-largest carmaker in terms of sales, with operations in all major vehicle markets.

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