Fiat Chrysler Automobiles and Peugeot S.A. have signed a binding agreement to a 50/50 merger of their businesses. Once the merger is complete, the combined company will be the fourth largest automobile producer in the world. Based on 2018 numbers, the business will sell roughly 8.7 million vehicles annually and have revenues near €170 billion. There will be a strong balance sheet that will allow the new entity headroom to execute strategic plans. Geographically, 46% of revenue will come from Europe and 43% from North America.
A number of operational efficiencies will be gained by the sharing of platforms and engine technology. The number of platforms will be reduced with approximately 6 million cars a year concentrated on just two platforms.The platform consolidations will account for approximately 40% of the estimated €3.7 billion in savings expected from the merger.
Peugeot CEO Carlos Tavares will be CEO of the new company and a board member, while John Elkann of FCA will be Chairman of the Board. The completion of the combination is expected to take 12 to 15 months during which time they will be completing items to the satisfaction of antitrust and other regulatory requirements.