FCA and Groupe PSA merger ahead

Fiat Chrysler Automobiles (FCA) and Peugeot S.A. (Groupe PSA) have signed a binding combination agreement providing for a 50/50 merger of its businesses to create the fourth largest global automotive OEM by volume and third largest by revenue.

With its combined financial strength and skills, the merged entity will be placed to provide innovative, clean and sustainable mobility solutions, both in a rapidly urbanizing environment and in rural areas around the world.

The combined company will have annual unit sales of 8.7 million vehicles, with revenues of nearly €170bn, recurring operating profit of over €11bn and an operating profit margin of 6.6 per cent, all on an aggregated basis of 2018 results. The combined balance sheet provides financial flexibility and headroom both to execute strategic plans and invest in new technologies throughout the cycle.

Completion of the proposed combination is expected to take place in 12-15 months, subject to customary closing conditions, including approval by both companies' shareholders at their respective extraordinary general meetings and the satisfaction of antitrust and other regulatory requirements.

Carlos Tavares, chairman of the managing board of Groupe PSA, said: "Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology and services. I have every confidence that with their immense talent and their collaborative mindset, our teams will succeed in delivering maximized performance with vigour and enthusiasm."