Fiat Chrysler and Peugeot sign deal for 50-50 merger
Milan: The boards of Fiat Chrysler Automobiles and PSA Peugeot on Wednesday signed a binding merger deal creating the world's fourth-largest auto company with the scale to confront the challenges of stricter emissions regulations and the transition to new driving technologies.
The companies said in a joint statement that the new group will be led by PSA's cost-cutting CEO Carlo Tavares, with Fiat Chrysler's chairman John Elkann as chairman of the merged company. Fiat Chrysler CEO Mike Manley will stay on, but it was not announced in what capacity.
No name for the new company has been decided, executives said in a conference call, but both Tavares and Manley insisted that it was not a "touchy subject".
The deal, which was unveiled in October, was announced as a 50-50 merger, but PSA has one extra seat at the board and Tavares at the helm, giving the French carmaker the upper hand in daily management.
The executives said they expect the deal to take 12-15 months to close. It will give birth to a group with revenues of nearly 170 billion euros and producing 8.7 million cars a year just behind Toyota, Volkswagen and the Renault-Nissan alliance.
The merger is expected to create 3.7 billion euros in annual savings, which will be invested in "the new era of sustainable mobility" and to meet strict new emissions regulations, particularly in Europe.
"The merged entity will maneuver with speed and efficiency in an automotive industry undergoing rapid and fundamental changes," the carmakers said in the joint statement.
New technologies includes electrified engines, autonomous driving and connectivity, part of what Tavares described as "the transition to a world of clean, safe and sustainable mobility". No plants will be closed under the deal, the companies said.