Peugeot-maker PSA and Fiat Chrysler unveiled Thursday their plan for a 50-50 merger that aims to create the world's fourth-largest car manufacturer, headquartered in the Netherlands, AFP reports.
With 8.7 million in vehicles, the combination would create the 4th largest global OEM in terms of annual unit sales, the press release says.
– The shareholders of each company would own 50% of the equity of the newly combined group and would therefore share equally in the benefits arising from the combination – the joint press release says.
The Board would be composed of 11 members. Five Board members would be nominated by FCA (including John Elkann as Chairman) and five would be nominated by Groupe PSA (including the Senior Independent Director and the Vice Chairman). The Chief Executive Officer would be Carlos Tavares for an initial term of five years and he would also be a member of the Board.
The merger would create approximately EUR 3.7 billion estimated annual run-rate synergies without any plant closures resulting from the transaction.
In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage its strong global R&D footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency, the press release says.
– The plan to combine the Groupe PSA and FCA businesses follows intensive discussions between the senior managements of the two companies. 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 say in a joint statement.
PSA Peugeot said that, prior to completion, it would distribute to its shareholders its 46% stake in Faurecia.
For the moment, the French government has signaled its support for the merger, but Economy Minister Bruno Le Maire warned we "will remain particularly vigilant on the industrial footprint in France, where decision making will be located, and promises by the new group to create in Europe the infrastructure to build electric batteries" needed for the shift to new vehicles, AFP reports.
Fiat Chrysler tried to merge with PSA's French rival Renault earlier this year, but the deal was scuppered in part by opposition from the French government, which owns stakes in both PSA and Renault, the agency adds.
PSA includes Peugeot, Citroen, Open, DS and Vauxhall brands.
The group has an interesting structure – the Chinese Dongfeng Motor Group, the French state and Peugeot have equal stakes – 13.68% each.
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