Fiat Chrysler Automobiles and PSA Group have agreed in principle to merge. In a joint statement, the FCA and PSA boards announced they would work towards a binding agreement “within weeks”. The merger would create the world’s fourth-largest car maker with a market value of about $50 billion. The shareholding will be 50/50 between the two groups, and the joint board will include five members from PSA and five from FCA. Carlos Tavares of PSA will be CEO, while John Elkann will be chairman.
The tie-up brings together the Agnelli/Elkann clan in Italy and the Peugeot family of France, and follows collapsed talks earlier this year with Renault.
The companies say the merger would benefit both entities. FCA would gain access to new platforms (particularly SUVs) and expertise in electrification (such as Peugeot’s e-Legend concept car, pictured). PSA in turn could draw on FCA’s strong presence in North America. Cost savings of as much as 3.7 billion euros are expected, with no plant closures.