According to FCA, the merger would create the fourth largest global OEM in terms of annual unit sales, with around 8.7 vehicles, combined revenues of nearly €170 billion, and recurring operating profit of over €11 billion on a simple aggregated basis of 2018 results, excluding Magneti Marelli and Faurecia. The combination would unite their respective brand strengths across luxury, premium, mainstream passenger car, SUV and trucks and light commercial.
“The plan to combine the Groupe PSA and FCA businesses follows intensive discussions between the senior managements of the two companies. Both share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to capture successfully the opportunities and manage effectively the challenges of the new era in mobility”, said FCA in a statement.
The merger of both automotive manufacturers would occur under a Dutch parent company, listed in Paris, Milan and New York. Governance would be balanced between shareholders and the majority of directors would be independent. It is projected that 80% of the synergies would be achieved after four years, and the total one-time cost of achieving the synergies is estimated at €2.8 billion.
In early June, the board of FCA announced it withdrew the merger proposal previously made to French automotive manufacturer, Groupe Renault. Read more here.