The rumours are true: FCA (Fiat Chrysler Automobiles) is merging with PSA, the European maker of Peugeot, Citroen, Opel and Vauxhall vehicles, both corporations confirmed in a press release October 31.
According to The Detroit Free Press, the two companies struck a deal that will see a 50-50 joint shareholder-owned entity. There would be no plant closures, and the combined entity would save 3.7 billion Euro annually.
The two companies will have combined revenues of 170 billion Euro, with profits of more than 11 billion Euro based on 2018 figures. The new corporation will become the fourth-largest automotive group in the world. The hope is the partnership will see more automakers come together and develop self-driving technology and electrification.
Under the umbrella of a Dutch parent company, the FCA and PSA will combine with a board made up of 11 members, of which each company will nominate five. Carlos Tavares of PSA will be the CEO of the new company, while John Elkmann will retain his role as FCA Chairman.
The decision is still to be finalized in a memorandum of understanding in the coming weeks, but both brands have agreed to proceed.
Before his death, it was FCA CEO Sergio Marchionne’s vision to create a more consolidated automotive industry, and it seems like this is helping fulfill that vision.
The new company will be listed on the New York, Paris and Milan stock exchanges. It isn’t clear what the group will be called yet.