Fiat Chrysler and Peugeot parent PSA Group announced a $48 billion merger Thursday, creating the world's fourth-largest automaker with combined revenues of $190 billion and a global workforce of 410,000.
The combination comes as auto sales have cooled worldwide and carmakers are under increasing pressure to develop and refine the green technologies needed to meet new emissions targets in Europe, China and other markets, as well as position themselves for their autonomous futures. But such innovations come with huge outlays for research and development, prompting traditional automakers to pursue corporate partnerships and acquisitions to help spread those costs.
The companies announced that shareholders of Fiat Chrysler and Peugeot would own 50 percent of the consolidated company. The merged company will be based in the Netherlands, the current home of Fiat Chrysler. Combined, the two companies sold 8.7 million cars last year, topping General Motors and coming behind of Volkswagen and Toyota.
A finalized agreement could come within weeks. Once completed, John Elkann, Fiat Chrysler’s chairman, will be chairman of the new company and PSA Chief Executive Carlos Tavares would become CEO. Shares of the new company will be listed in New York, Paris and Milan. The stock prices of both Fiat Chrysler and Peugeot rose earlier this week on reports that a merger was expected.
(c) 2019, The Washington Post · Rachel Siegel