FCA and PSA have successfully agreed in a merger that binds the two companies in a $50 billion deal. Once the merger is successful, it will become the fourth’s largest car maker in the world.
In an effort to reduce costs – an estimated 3.7 billion euros – by sharing technologies and purchasing, the firms will be able to focus more on producing further models which are adapted to the increasing rules regarding emissions. But before the merger takes place in 12-15 months, one of PSA’s shareholders, Dongfeng Motor Group from China, will take away its 12.2% stake by selling its 30.7 million shares back to PSA. According to Reuters, that stake is worth as much as 679 million euros as of its most recent closing price. Dongfeng will then be set to own 4.5% of the group after merging.
PSA and FCA have revealed that the new company will have 11 board members with 5 nominated from PSA and five from FCA. Alongside this, the current CEO of PSA will become the CEO of the merged entity and the 11th on the board for a five year term. They are yet to think of a name for the resulting group.
It’s safe to say that this merger will shake up the motoring landscape and allow all the manufacturers under the umbrella to spread their wings slightly with the sharing of engines and chassis allowing brilliant but cost effective cars to be produced. We’re hoping for the best and will keep you updated as we hear more.