PSA Group and Fiat Chrysler Automobiles (FCA) have confirmed plans for a merger, with a final agreement expected in the coming weeks.
Both businesses have unanimously agreed to a 50:50 merger resulting in a company that will be the fourth largest auto-maker in the world, selling more than 8.7 million vehicles each year.
The merged entity will bring together the companies’ capabilities in the technologies shaping the new era of sustainable mobility, including electrified powertrain, autonomous driving and digital connectivity.
Annual cost savings of £3.2bn are expected as a result of the deal, with no planned plant closures.
The Board would be composed of 11 members. Five Board members would be nominated by FCA (including John Elkann as chairman) and five would be nominated by Groupe PSA (including the senior independent director and the vice chairman). The chief executive officer would be Carlos Tavares for an initial term of five years and he would also be a member of the Board.
The new company will be incorporated in the Netherlands, a neutral location, but it would retain stock market listings in Paris, Milan and New York, as well as maintaining “significant presences” in major office locations in France, Italy and the US.
Exor, the Agnelli family investment company, will have the largest stake in the merged group. Other large shareholders are the Peugeot family, China’s Dongfeng Motor and the French state.