The PSA Group and Fiat Chrysler Automobiles have officially signed a deal for a full merger, creating the world’s fourth largest car manufacturer with around 8.7 million sales and combined revenues of £144 billion.
The two companies provisionally agreed the deal in October, but have now signed a binding Combination Agreement. The merger process will take place over the next 12-15 months, with the firms saying it will create a company with the “leadership, resources and scale to be at the forefront of a new era of sustainable mobility.”
It claims that the combined PSA-FCA group will allow for £3.1 billion in ‘run rate synergies’, through the efficiencies enabled by shared investments in “vehicle platforms, engine families and new technologies” – but said that no plant closures will occur as a result of the deal.
While no firms details have been announced, PSA-FCA has said that more than two-thirds of its production will be focused on two platforms, with a small platform and compact/mid-size platform both accounting for around three million cars annually. Although unconfirmed, these are likely to be the PSA Group’s CMP and LMA2 platforms, which are both capable of running combustion, hybrid and full electric powertrains.
The merged company will include a number of high-profile car brands. The PSA Group owns Citroën, DS, Peugeot and Vauxhall-Opel, while FCA’s brands include Alfa Romeo, Chrysler, Fiat, Dodge, Jeep, Lancia, Maserati and Ram.
The release outlining the binding agreement says PSA-FCA will focus on its core markets of Europe, North American and Latin America – but says it will “reshape the strategy in other regions.” In particular, both firms have struggled to gain a foothold in the vital Chinese market in recent years.