Fiat Chrysler and Peugeot owner PSA merge in a $50 billion deal

After weeks of negotiations, the two car groups Fiat-Chrysler and PSA decided on a $ 50 billion mega-merger. The merger is expected to be completed in the next twelve to 15 months. The companies would sell around 8.7 million vehicles, generate more than 180 billion euros in sales and employ almost 410,000 people worldwide. Together, Fiat Chrysler and Peugeot would be in fourth place worldwide behind Volkswagen, Toyota and the alliance of Renault and Nissan.

PSA and FCA confirmed the new company will have an 11-strong board, with five members nominated by PSA, another five by FCA. These will include labor representatives from both.

PSA boss Carlos Tavares, who will become CEO of the merged entity for an initial five-year term, will have the additional seat on the board.

PSA and Fiat Chrysler comparison in billion Euro

Roksure graphic                                                                            *Source: Reuters

Once completed the merger will form a group with recurring operating profit of more than €11bn and total vehicle sales of 8.7m, according to the companies.

No plants will close as a result of the merger, which they said would result in annual cost savings of around €3.7bn.

PSA has started the trading session today with an 4.4% gap up, but buyers were not able to move the stock higher in anticipation of further news releases about future job cuts and optimization plans.