Fiat Chrysler and Peugeot agree mega-merger agreement
Fiat Chrysler and Peugeot agree a mega-merger agreement that will create the fourth largest car company in the world
- French car manufacturer and American-Italian rival have reached agreement on merger due to costly transitions
- They are preparing to produce cleaner and more sustainable vehicles
- Move comes as the pair behind rivals such as Volkswagen and Toyota
Fiat Chrysler and Peugeot have signed a mega-merger agreement that will create the fourth largest car company in the world.
The French car manufacturer and the decision of his American-Italian rival come as the sector struggles with the difficulty of a costly transition to the production of cleaner and more sustainable vehicles.
There will be no factory closures because of the deal that was agreed today, they said.
The two engine companies support the global rivals Volkswagen, Renault-Nissan-Mitsubushi and Toyota, which have a total turnover of $ 190 million (£ 150 million) and an annual turnover of around 8.7 million vehicles.
Fiat Chrysler and Peugeot have agreed a mega-merger agreement to create the fourth largest car company in the world. The new group will be based in the Netherlands and remain listed on the stock exchanges of Paris, Milan and New York
In a statement, the company said: & Fiat Chrysler Automobiles and Peugeot SA (Groupe PSA) today signed a binding combination agreement providing for a 50/50 merger of their activities to become the fourth largest producer of original original automobile create parts by volume and third largest by turnover. & # 39;
The brands include Fiat, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Jeep, Lancia, Maserati, Opel, Peugeot and Vauxhall.
The joint entity will have the leadership, resources and scale to lead the way in a new era of sustainable mobility, "said PSA and Fiat Chrysler.
The band – to which both parties originally agreed at the end of October – will have & # 39; approximately 3.7 billion euros in estimated annual synergies & # 39; deliver cost savings.
The merger is expected to be completed in 12-15 months, the statement said.
There are no factory closures due to the deal, the company said. Fiat Chrysler chief John Elkann, left, becomes PSA chairman and Carlos Tavares, right, chief executive. Mr. Elkman becomes chairman of the group and Mr. Tavares becomes president-director
Brands for the company include Fiat, Alfa Romeo and Citroen. Above, a file photo was taken in Bayonne, southwest France, this year
& # 39; Our merger is a huge opportunity to take a stronger position in the automotive industry if we want to control the transition to a world of clean, safe and sustainable mobility, & # 39; said Carlos Tavares of PSA in a statement.
Fiat Chrysler CEO Mike Manley saw it as & # 39; a union of two companies with incredible brands and a skilled and dedicated workforce. Both have gone through the toughest times and have emerged as agile, smart, formidable competitors.
The combined group – which has not yet been given a name – is said to have its headquarters in the Netherlands and remain listed on the Paris, Milan and New York stock exchanges.
Fiat Chrysler chief John Elkann becomes chairman and PSA & Tavares chief executive.
The lion's share of the savings will be generated by joint technology, product and platform development, as well as in procurement, but also in marketing, IT systems and logistics, the statement said.
The merger is expected to generate savings for both companies to help them struggle with a changing automotive market
& # 39; These synergies will enable the combined company to invest significantly in the technologies and services that will shape mobility in the future, while meeting the challenging global CO2 regulations. & # 39;
Prior to the closing of the merger, Fiat Chrysler will pay a special dividend of 5.5 billion euros to its shareholders, while PSA will pay its 46 percent stake in parts maker Faurecia to its shareholders.
Analysts nevertheless claim that the two companies are still too dependent on the shrinking European market and lack a strong presence in China, the world's largest car market.
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