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FCA and PSA Group make merger official

The cat’s finally out of the bag with FCA and PSA making an official announcement on its planned merger.

FIAT CHRYSLER AUTOMOBILES and PSA Group have signed a binding agreement to a merger that will see the world’s fourth largest auto alliance formed.

The new FCA-PSA alliance will sit behind Volkswagen Group, Toyota, and the Renault-Nissan-Mitsubishi triumvirate by volume. It will bring together the pairing’s car brands Jeep, Ram, Dodge, Chrysler, Alfa Romeo, Fiat, Maserati, Lancia, Peugeot, Opel, Citroen, DS and Vauxhall.

Current PSA CEO Carlos Tavares will head the group and be the eleventh member of a split board of directors of five representatives from FCA and PSA. Current FCA chairman John Elkann will retain his position.

Finalising the merger will take up to 15 months to complete and once in motion is expected to bring a combined saving of around $6 billion per annum from effencies such as platform and technology sharing.

It is likely that both PSA and FCA will base the majority of new vehicles on PSA’s latest CMP and EMP platforms, which are hybrid and battery electric vehicle ready.

That will help the group achieve an annual production volume of over 8.5 million vehicles per year and a combined profit of almost $18 billion.

The merger will see FCA shareholders share a combined dividend of $9 billion and PSA shareholders $5 billion.

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Alex Rae

Alex Rae