Fiat Chrysler will join forces with PSA Groupe to create fourth-largest carmaker
FCA has a new partner after talks with Renault failed a few months ago
FCA (Fiat Chrysler) and PSA Groupe (Opel, Peugeot, Citroen) will join forces in a 50-50 merger to create the world's fourth-largest automaker.
The Supervisory Board of Peugeot S.A. and the Board of Directors of FCA N.V. have each unanimously agreed to work towards a full combination of their respective businesses by way of a 50/50 merger. Both boards have given the mandate to their respective teams to finalize the discussions to reach a binding Memorandum of Understanding in the coming weeks.
The new deal will create the 4th largest global OEM in terms of annual unit sales (8.7m vehicles). The new company will be valuated at $50 billion and will be domiciled in the Netherlands with PSA's Carlos Tavares as CEO and FCA's John Elkann as chairman.
FCA was in talks with Renault just a few months ago, but the potential merger was abandonend.
The merger will create a group that will include the Fiat, Dodge, Ram, Chrysler, Alfa Romeo, Maserati, Peugeot, Citroen, DS, Opel and Vauxhall brands and will serve mass and premium passenger car markets as well as trucks and light commercial vehicles.
It is projected that 80% of the synergies would be achieved after 4 years. The total one-time cost of achieving the synergies is estimated at €2.8 billion.