The board of directors of the French and Italian car manufacturers Fiat Chrysler and Peugeot have accepted the auto merger as equals. This statement from the companies confirms the earlier media writing this week. The shareholders of each company would own 50% of the equity of the newly combined group.
According to the companies, this new combination will create the 4th largest global auto company with 8,7 million vehicles annually. The strength areas would be the FC´s in the North America and Latin America and Peugeot PSA´s strength in Europe. The brand areas would include luxury, premium, mainstream, passenger car, SUVs and Trucks.
-The merged entity would bring together the companies’ extensive and growing capabilities in the technologies shaping the new era of sustainable mobility, including electrified powertrain, autonomous driving and digital connectivity, the companies say in the press release.
The Fiat Chrysler and Peugeot estimate that the annual run-rate synergies would be 3,7 billion euros without any plant closures resulting from the transaction. According to the release, it is argued that 80% of the synergies would be achieved after 4 years.
-The total one-timecost of achieving the synergies is estimated at €2.8 billion, Fiat Chrysler and Peugeot say.
The new company would have Dutch parent company, with Dutch governing rules, and the Board would include a majority of independent Directors. John Elkann would be the Chairman of the Board and Carlos Tavares would be as CEO, but also a member of the board.
It is expected that the companies form the Memorandum of Understanding in the coming weeks.
– Both share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to capture successfully the opportunities and manage effectively the challenges of the new era in mobility, the companies underline the benefits of the merger.
The new car company would have annual revenues, combined of nearly 170 billion euros and operating profit over 11 billion euros.