Fiat Chrysler and Peugeot announce merger agreement

The advice of French automaker PSA, owner of Peugeot, and Fiat Chrysler (FCA) approved on Wednesday (18) an agreement for a merger. The new company will form the world's fourth largest vehicle manufacturer in sales. According to a joint statement from the companies, the merger will help the new automaker address the industry's major challenges, including the global slowdown in demand and the need to develop cleaner cars to meet the looming anti-pollution rules. With this, manufacturers will benefit from the strength of each in different markets. While the FCA will use PSA's strength in Europe, PSA will seek opportunities for the FCA's solid position in the United States. The group will include the Brands Fiat, Jeep, Dodge, Ram, Chrysler, Alfa Romeo, Maserati, Peugeot, DS, Opel and Vauxhall, allowing to serve mass markets and premium cars, as well as for trucks and light commercial vehicles. Details about the merger: Merger will create the 4th largest vehicle manufacturer in the world, with 8.7 million units sold; The FCA would have access to PSA's most modern vehicle platforms, helping it comply with strict rules on new emissions; All segments will be considered, from luxury cars, to SUVs, pickup trucks and light commercials; Focus will be on two platforms: one small and one compact/medium; Total of 3.7 billion euros in annual synergies; Total cost to achieve synergies is estimated at 2.8 billion euros; The group's parent company will be headquartered in the Netherlands; Factory closures are not considered; Peugeot's current chief executive, Carlos Tavares, will be the CEO and board member in an initial 5-year term; Current FCA President John Elkann will be the chairman of the new group; Group name has not yet been set.