Fiat Chrysler Automobiles N.V. (FCA) and Peugeot S.A. (Groupe PSA) have signed a binding Combination Agreement providing for a 50/50 merger of their businesses. 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.
The Board of the merged entitiy will be comprised of eleven members, the majority of whom will be independent. Five Board members will be nominated by FCA and its reference shareholder (including John Elkann as Chairman) and five will be nominated by Groupe PSA and its reference shareholders (including the Senior Non-Executive Director and the Vice Chairman). At closing the Board will include two members representing FCA and Groupe PSA employees. Carlos Tavares will be Chief Executive Officer for an initial term of five years and will also be a member of the Board.
The combined entity will have a global presence with a portfolio covering all key vehicle segments from luxury, premium, and mainstream passenger cars through to SUVs and trucks and light commercial vehicles. This will be underpinned by FCA’s strength in North America and Latin America and Groupe PSA’s solid position in Europe. The new Group will have much greater geographic balance with 46% of revenues derived from Europe and 43% from North America, based on aggregated 2018 figures of each company. The combination will bring the opportunity for the new company to reshape the strategy in other regions.