After agreeing to merge in October, Fiat Chrysler Automobiles and PSA Group on Wednesday made it official by signing an agreement that will set the process in motion.
The automakers expect the merger to be completed in 12-15 months, at which point we'll be looking at a behemoth controlling 13 brands: Citroen, DS, Opel, Peugeot and Vauxhall at PSA and Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati and Ram at FCA.
Based on 2018's sales performance of FCA and PSA, the merged entity will have annual sales of 8.7 million units and revenues of nearly $190 billion, with the core markets consisting of Europe, North America and Latin America. The numbers will also see it sit as the fourth biggest automaker by volume, behind only Toyota, Volkswagen Group and the Renault Nissan Mitsubishi Alliance.
The merged company is estimated to be worth over $48 billion and the shares will be split 50/50 between the current shareholders of FCA and PSA. The major shareholders include Exor, Bpifrance, the Peugeot Family and Dongfeng.
FCA Chairman John Elkann will serve as chairman of the merged company and PSA CEO Carlos Tavares as CEO. The company's board will have 11 members, most of them expected to be independent.
Estimated annual synergies of the merger are $4.1 billion; these won't come from any plant closures but rather improved efficiencies and sharing of development costs and purchasing. A specific measure will be utilizing two platforms for roughly two thirds of the fleet. One platform will be for subcompact vehicles and the other for compact and mid-size vehicles. They likely correspond to PSA's existing CMP and EMP2 platforms.