Fiat Chrysler Automobiles (FCA) and PSA Group have announced a 50-50 share merger agreement that will see the creation of the world’s 4th largest automaker. In a joint statement, both companies said that they will finalize the discussions to reach a binding agreement in coming weeks.
The merger would help the two groups to cope up with costly new technologies and slowing global demand. The new entity will have a combined sales volume of 8.7 million vehicles and revenue of nearly €170 billion. PSA and FCA said that the combined entity will be able to leverage its strong global R&D footprint and ecosystem to foster innovation and meet the new challenges in connected, electrified, shared and autonomous mobility with better speed and capital efficiency.
The merger will also fulfill the dreams of its former CEO, Sergio Marchionne (late), who firmly believed in combining strengths for cost savings and scale. Merger with PSA is FCA’s second such attempt this year. Some 5 months ago, it approached for a merger deal with Renault, but negotiations couldn’t shape up due to hindrance from Renault’s alliance partner Nissan and some unclear political conditions.