Official: Fiat-Chrysler and Peugeot-Citroën, one step away from merging and becoming the same company

[Inkriql]

The Fiat-Chrysler Automobiles and PSA groups confirmed having very advanced negotiations to merge and create a new company, with shares divided equally. After a brief statement released yesterday, they gave details of the agreement that could revolutionize the sector.

If the merger takes place, the resulting company will become the fourth largest car manufacturer in the world in terms of annual unit sales, the result of 8.7 million vehicles, according to official estimates.

Today, FCA administers Fiat, Chrysler, Jeep, Dodge, Ram, Alfa Romeo, Maserati and Lancia. PSA, meanwhile, does the same with Peugeot, Citroën, DS, Opel and Vauxhall. The latter is currently the second strongest group in Europe.

The statement confirms that the merger "would combine the strengths of the respective brands" in each of the segments in which they participate: from luxury cars to utility vehicles, through SUVs, passenger vehicles and pick-ups.

"The portfolio would cover all market segments with emblematic brands and strong products based on streamlined platforms and investment optimization," they say from both companies.

While the details were agreed "unanimously", both Councils are waiting for a binding Memorandum of Understanding that, they estimate, will be achieved in the coming weeks. Only there will the merger be fully confirmed, although it seems difficult to reverse.

FCA and PSA estimate that 80 percent of the synergies will be achieved after four years of merger, at a cost of 2.8 billion euros. The significant increase in the value resulting from the transaction is of the order of 3.7 billion euros in projected annual synergies.

The transfer of shares would be achieved through a merger through a Dutch parent company, with a balanced governance structure between shareholders and a majority of independent directors. The Board of Directors will have five members appointed by FCA and five by PSA, in addition to the executive director Carlos Tavares (PSA).

The company resulting from this - almost confirmed - merger will be listed on the Euronext (Paris), the Italian Stock Exchange (Milan) and the New York Stock Exchange, in addition to continuing with "significant presence" in the current headquarters of France , Italy and the United States.