Fiat Chrysler and Peugeot owner PSA agree to merge to create the world's 4th biggest carmaker
- Fiat-Chrysler and PSA, announced on Wednesday that the two auto giants will merge, creating the fourth-largest automaker in the world.
- The combined company will have combined revenues of €170 billion ($189 billion), and be worth about €41.4 billion ($46 billion).
- Peugeot stock rose 4.2% in morning trading in Europe, while FCA pushed up 1.7%.
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Fiat-Chrysler and the owner of Peugeot, PSA, announced on Wednesday that the two auto giants will merge, creating the fourth-largest automaker in the world.
According to PSA, the combined company would have combined revenues of €170 billion ($189 billion), and going by the stock value, the new company would be worth about €41.4 billion ($46 billion).
The two auto giants in October confirmed talks to combine - today's announcement includes the fine print, detailing the make-up of the combined entity. Fiat Chrysler had previously looked to merge with GM in 2015, which ultimately failed.
"With an already strong global R&D footprint, the combined entity will have a robust platform to foster innovation and further drive development of transformational capabilities in new energy vehicles, sustainable mobility, autonomous driving and connectivity," the companies said in the statement.
Completion of the proposed combination is expected in 12 to 15 months. John Elkann will become group chairman, while Carlos Tavares will be group CEO. Fiat Chrysler CEO Sergio Marchionne died last year.
The merger will be 50-50 according to the announcement, and no plants will be closed. The new firm will have annual sales of 8.7 million units, with profits of €11 billion ($12.2 billion.)
The merger means that the new company will overtake Ford ($37.3 billion) in terms of value, as well as give Peugeot presence in North America.
Peugeot stock rose 4.2% in morning trading in Europe, while FCA pushed up 1.7% also on the news of the merger.
"The merged entity will maneuver with speed and efficiency in an automotive industry undergoing rapid and fundamental changes," the statement said.
Read more: Fiat Chrysler has been trying to merge with another carmaker for years - here's why