Potential FCA, Peugeot merger would be credit positive: S&P

MILAN (Reuters) - A potential merger between Fiat Chrysler FCHA.MI and Peugeot PEUP.PA would be credit-positive for both car makers, S&P Global Ratings said on Wednesday, after the companies confirmed they were in talks over a possible tie-up.

“We believe that these merger talks arrive at the right time and could have positive long-term credit consequences for both (car makers), assuming an all-equity merger,” the rating agency said in a statement.

“At the same time, we expect that meaningful synergies would take time, involve meaningful restructuring costs, and entail some execution risk, given potential political resistance when it comes to cost rationalization efforts.”

Reporting by Silvia Aloisi