Fiat Chrysler Automobiles (FCA) and Peugeot (PSA) have confirmed the deal to create a joint company, CNBC news reported on Thursday, with FCA's John Elkann becoming the chairman and PSA's Carlos Tavares becoming the CEO of the future company.
“Discussions have opened a path to the creation of a new group with global scale and resources owned 50% by Groupe PSA shareholders and 50% by FCA shareholders”, the companies' joint statement said on Thursday morning, cited by CNBC.
Fiat Chrysler and PSA said that the future company should save more than $4 billion a year from "run-rate synergies without any plant closures''. It will also emerge as the fourth-largest auto company in the world, after Volkswagen Group, Renault-Nissan, and Toyota.
Additionally, such brands as Alfa Romeo, Citroën, Chrysler, Dodge, DS, Fiat, Maserati, Opel, Peugeot, Ram, and Vauxhall, will be united under the announced tied-up.
The emerging company will be registered in the Netherlands, while also maintaining head-office locations in France, Italy, and the US.
Earlier, PSA Group wrote on its official Twitter account that the merger aims to make the company into a global leader and enter a new era of sustainable mobility.
It is not the first time FCA has considered merging with a company, as it sought to team up with the PSA's French rival Renault, but the deal was scuttled by the French government. The FCA-PSA merger, however, has already received signs of approval from the French authorities.
The FCA and PSA are now to submit their deal with the employee bodies interested and sign a Memorandum of Understanding along with an agreement on definitive documentation, which would be final step in the merging process.