Fiat Chrysler Automobiles and PSA Group have agreed to the terms of a merger just after it was announced they were talking just yesterday. PSA's board has already agreed to the deal and is awaiting approval from FCA's board which is meeting later tonight.
The merger, if approved, would create the 4th largest automotive company in the world with nearly $50 billion in value.
FCA Chairman John Elkann would retain his chairmanship of the new company while Peugeot CEO Carlos Tavares would stay on as CEO. The board would be comprised of six appointees from Peugeot while FCA would get five.
Both companies would pay dividends to their shareholders, €3 billion from Peugeot and €5 billion from FCA plus an additional €250 million from the sale of its Comau unit. Peugeot will sell its stake in auto parts make Faurecia.
Where the new company would be based has not yet been decided. Both the French and U.S. governments have been briefed on the deal.