PSA and FCA Merger Plan Officially Released

IIA learned from PSA Group on Thursday that the group and the Fiat Chrysler Automobiles (FCA) agreed to merge, both sides plan to join forces in a 50-50 share merger to create the world's fourth-largest automaker. The merger will generate a synergy of 3.7 billion euros per year. The two automakers said in a joint statement that the boards of both parties have authorized their teams to conduct final negotiations and reach a binding MOU in the coming weeks.

The organizational structure of the new company will be balanced among the funding shareholders, and most of the directors are independent. The board of directors will consist of 11 members. FCA will nominate five board members, and FCA Group Chairman John Elkann will serve as the chairman of the combined group. PSA will also nominate five members, including senior independent chairman and vice chairman. Carlos Tavares, Chairman of the PSA Group Management Committee, will serve as CEO and Board of Directors for an initial term of five years.

Currently, the world's top three automakers are Volkswagen Group, Renault-Nissan-Mitsubishi Alliance and Toyota Group. In 2018, PSA and FCA Group sold 8.7 million new vehicles worldwide, with a revenue of nearly 170 billion euros and a recurring operating profit of more than 11 billion euros. After the merger, it will become the world's fourth largest automaker, breaking the existing pattern of the global auto industry.

The merger of the two groups involves multiple automobile brands. The PSA Group has five major auto brands-Peugeot, Citroen, DS, Opel, Vauxhall, and the shared travel service brand “Free2Move”. The FCA Group owns Maserati, Alfa Romeo and Jeep, etc.