PSA and FCA confirm merger

The PSA Group and Fiat Chrysler Automobiles have agreed to merge on a 50/50 basis, thereby creating the fourth largest automotive company in the world.

The new combined group will be able to record unit sales of 8.7 million vehicles, with combined revenues of nearly €170bn and recurring operating profit of over €11bn.

It is projected that 80% of the synergies would be achieved after four years. The total one-time cost of achieving the synergies is estimated at €2.8bn.

The new board will comprise five nominees from PSA Group and five from FCA, along with Carlos Tavares, who will be CEO for an initial five-year period.

He said: “This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity. I’m pleased with the work already done with Mike and will be very happy to work with him to build a great company together.”

Mike Manley, FCA CEO, said: “I’m delighted by the opportunity to work with Carlos and his team on this potentially industry-changing combination. 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.”