Fiat Chrysler Automobiles (FCA)
and PSA Peugeot on Thursday announced plans to merge to create
the world's fourth-biggest carmaking group.
"Groupe PSA and FCA plan to join forces to build a world
leader for a new era in sustainable mobility," the carmakers
said in a joint statement.
The two groups will merge as equal partners.
"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 statement said.
It said the merger of the Italian-American group with its
French rival should create 3.7-billion of annual run-rate
synergies without any plant closures.
The combined group will have annual unit sales of around 8.7
million vehicles making it the fourth top car producer after
Toyota, Volkswagen and the Renault-Nissan alliance.
It will have combined revenues of nearly 170 billion euros,
recurring operating profit of over 11 billion euros and
capitalization of around 45 billion euros.
FCA Chairman and Agnelli family heir John Elkann is set to be
the chairman of the new group and PSA Peugeot CEO Carlos Tavares
will be chief executive.
FCA CEO Mike Manley is set to work closely with Tavares in a
senior executive role.
"I'm delighted by the opportunity to work with Carlos and his
team on this potentially industry-changing combination," Manley
was quoted as saying in the statement.
"We have a long history of successful cooperation with Groupe
PSA and I am convinced that together with our great people we
can create a world class global mobility company".
But in a conference call with investors on Thursday, Manley
warned that "there is still a long way to go" before an
agreement is reached.
Elkann said in a letter to staff that "I see the opportunity
to create something really special together, a group combining
the capabilities, intelligence and passion of two strong and
successful companies, taking the best from both. Our common goal
is to create a group that is leader in sustainable mobility,
able to grasp the many opportunities of a new era".
Premier Giuseppe Conte said the government will be watching
closely.
"It's a market operation," he said.
"I cannot judge the agreement but what is important to the
government is that the level of production and employment in
Italy is guaranteed".
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