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Essential IR Insights Newsletter - February 2023

Peugeot, FCA agree terms of megamerger; Ford to invest $1.45B in Michigan


* French carmaker Peugeot SA and its Italian-American peer Fiat Chrysler Automobiles NV agreed the terms of a 50/50 merger that will create the fourth-largest global automaker by volume and the third-largest by revenue. Before closing, FCA will distribute a special dividend of €5.5 billion to shareholders, while PSA will distribute its 46% stake in parts maker Faurecia SE FCA will sell its industrial unit Comau. The merged entity will be "strongly placed" for significant investments in new energy vehicles, sustainable mobility, autonomous driving and connectivity, while meeting the challenging CO2 regulatory requirements.

* Ford Motor Co. is investing more than $1.45 billion in two Michigan manufacturing plants that will create 3,000 jobs. About $750 million and 2,700 new jobs will go to its manufacturing facility in Wayne, Mich., over the next three years to support the production of the Ford Bronco SUV and Ford Ranger pickup truck. The automaker will invest about $700 million and add 300 jobs at its Dearborn manufacturing plant to support the production of electrified versions of the F-150 pickup truck, including plug-in hybrid and fully electric F-150s.


* The Italian government said it welcomes the Fiat Chrysler-Peugeot merger, adding that it "will continue to closely monitor the impact in terms of development, investment and employment," Reuters reported, citing Finance Minister Roberto Gualtieri.

* General Motors Co. sued Hyundai Motor Co.'s U.S. arm for allegedly poaching Brian Latouf for trade secrets on self-driving and safety technology, Bloomberg News reported. Latouf, who is currently chief safety officer at Hyundai, was accused of violating non-compete agreements. General Motors asked the Delaware Chancery Court to ban Hyundai from using its technology and information, though Hyundai said it "has taken all necessary steps to ensure that information is protected and is not used in Brian's new role," a spokesman told Bloomberg News.


* Tesla Inc. is considering cutting prices of Model 3 vehicles built in China by 20%, or $10,000, Bloomberg News reported, citing sources. The electric-car maker, which will increase prices for Model 3 vehicles imported into China, was able to cut down costs by sourcing parts and batteries locally, and by forming battery supply deals with LG Chem Ltd. and Contemporary Amperex Technology Co. Ltd. Tesla's China-made Model 3 sedans currently start at 355,800 yuan.

* Tesla will alter the Autopilot capabilities of its European Model S and Model X vehicles to comply with the region's self-driving regulations, Electrek reported, citing Tesla's email to customers. The carmaker will restrict the self-driving software's auto-lane change and autosteer features, require users to hold the steering wheel every 15 seconds and require users to be within six meters of the vehicle to use the Summon feature. Tesla reduced Autopilot capabilities in Europe for its Model 3 vehicles in May.

* General Motors unveiled 360L, an in-vehicle audio entertainment system that allows owners of Chevrolet, Buick, GMC and Cadillac vehicles to listen to shows, music, interviews and podcasts. The carmaker said the update is available to about 1 million vehicles equipped with Sirius XM Holdings Inc.'s audio system.

* Volkswagen AG named Björn Goerke as chief technology officer of its Car.Software tech unit, effective Jan. 1.


* Didi Chuxing Technology Co. Ltd. plans to team up with original equipment manufacturers to develop tailor-made vehicles for its services, Gasgoo reported, citing senior vice president Chen Ting. The Chinese ride-hailing company plans to "build a system that makes our cars more suitable" for its rental and ride-hailing operations.

* Indonesian ride-hailing app PT Go-Jek Indonesia said it will discontinue most of its lifestyle services, including its beautician-booking and appliance repair services, the Nikkei Asian Review reported. Go-Jek will only retain its housekeeping and massage services to optimize its portfolio, according to Wesly Simatupang, who heads Go-Jek's GoLife platform.

* Uber Technologies Inc.-owned bike-sharing startup Jump will start rolling out its electric bicycles in Auckland, New Zealand, in 2020.


* A coalition of tech and auto companies, including Bayerische Motoren Werke AG, Daimler AG and Apple, asked the European Commission to take action on cases of patent abuse that are hampering the development of self-driving cars and other connected devices, the Financial Times reported, citing a letter from the companies. Without naming the patent holders, the coalition said its member companies were "being denied licenses for essential patents on fair terms" which is increasingly undermining the competitiveness of their industries and "harming technological innovation in Europe."


* Advent International acquired Brazilian auto-parts retailer Rondobras for an undisclosed amount, Reuters reported, citing a statement from the private equity firm. Advent will merge the operations of Rondobras, which operates 54 stores, with local parts-maker FortBras.


* Isuzu Motors Ltd. will buy commercial vehicle maker UD Trucks Corp. from Volvo Group for an enterprise value of 22 billion Swedish kronor, or $2.34 billion, as part of a partnership between the companies to co-develop commercial vehicles. As part of the agreement, Volvo and Isuzu will form a tech-sharing partnership for commercial vehicles designed for Japan and other markets.

* Electric-bus maker Proterra Inc. said it was among a number of companies selected for a contract to produce all-electric buses from the California Department of General Services. The contract will allow transit agencies and other institutions to purchase Proterra battery-electric buses and Proterra charging systems through the state's pre-established contract. Agencies outside of California can also leverage the statewide contract to simplify the process of purchasing electric buses.

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The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng gained 0.15% to 27,844.21, while the Nikkei 225 dropped 0.55% to 23,934.43.

In Europe, around midday, the FTSE 100 was up 0.13%% to 7,535.25, and the Euronext 100 increased 0.05% to 1,141.47.

On the macro front

The MBA mortgage applications report and the EIA petroleum status report is due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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