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© Reuters. Logos of Peugeot and Fiat are seen in this illustration picture
WASHINGTON (Reuters) - U.S. President Donald Trump's administration will look very closely at the planned merger between Fiat Chrysler (N:FCAU) and Peugeot owner PSA (PA:PEUP), White House economic adviser Larry Kudlow said on Friday.
The deal, announced on Thursday, would create the world's fourth-largest automaker.
"We will obviously look at it very, very carefully," Kudlow said on Bloomberg. "The president has not commented on the deal ... We're not afraid of doing business with international companies, Lord knows."
When asked about the 12.2% equity stake and 19.5% voting stake China's Dongfeng Motors holds in PSA, Kudlow said: "With respect to the Chinese story, we obviously are alert and on guard."
The deal, which would be structured as a 50-50 merger, would create the fourth-largest global automaker with annual sales of nearly 9 million vehicles. Fiat Chrysler told employees the deal could generate synergies of 3.7 billion euros but added "these synergies are NOT based on closing plants."
Fiat Chrysler declined to comment.
There has been speculation Dongfeng might sell its holdings, which could help ease the deal's passage through U.S. regulators, given U.S.-Chinese trade tensions.
"We will welcome a good deal. We hope it will get more production in the United States, more factories and workers and employment in the U.S. And with respect to the Chinese angle, we will take a careful look at it," Kudlow said.
Fiat Chrysler said on Thursday that "teams at both companies are working to finalize discussions and reach a Memorandum of Understanding in the coming weeks."
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