Fiat Chrysler and Peugeot owner announce $48 billion merger

Shareholders of each automaker might personal 50% of the blended operation, the companies said in a joint declaration on Thursday. A binding agreement will be finalized inside weeks, the statement stated. Fiat Chrysler shareholders also might get a special one time dividend well worth €5.Five billion ($6.1 billion) as a part of the deal.
The blended enterprise might be based totally within the Netherlands, that’s the modern headquarters of Fiat Chrysler, even though it will maintain a head workplace for its North American operations close to Detroit. John Elkann, the US-born scion of the Italian family that founded Fiat, might be chairman of the blended organization, whilst PSA leader executive Carlos Tavares might be CEO.
The combined employer would have roughly 410,000 personnel and annual revenues of $one hundred ninety billion. Fiat Chrysler (FCAU) and PSA (PUGOY) sold a mixed eight.7 million automobiles remaining year, simply in advance of General Motors (GM), which bought 8.3 million, and now not a ways in the back of Volkswagen (VLKAF) and Toyota (TM), which every offered over 10 million.
The merger comes amid a global income slowdown, which can get worse as economies around the arena sluggish or even fall into recession. At the equal time, carmakers are scrambling to invest in the electric and hybrid technology needed to meet strict new emissions objectives in China and Europe. The independent motors of the future also present a risk to conventional industry enterprise models. The massive amount of capital had to meet those new demanding situations has compelled a few automakers to locate companions and grew to become others into acquisition goals.
Jessica Caldwell, Edmunds’ govt director of industry analysis, stated the deliberate merger of Fiat Chrysler and France’s PSA “isn’t always without a doubt approximately product or expanding to new markets.” Rather, it’s approximately funding studies into the automobiles of the future.

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