Fiat Chrysler, Peugeot boards meet to finalise merger: Report

Reuters Milan, Italy Dec 17, 2019, 03.59 PM(IST)

File photo. Photograph:( Reuters )

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A source close to FCA said the two companies, Fiat Chrysler Automobiles and Peugeot, could announce the signing of a binding memorandum early on Wednesday, followed by a conference call to explain further details later in the day. 

The boards of Fiat Chrysler Automobiles NV FCHA.MI and Peugeot SA PEUP.PA will meet separately on Tuesday to discuss finalising an initial agreement for a $50 billion (38.9 billion pounds) merger to create the world's number four carmaker, sources said.

A source close to FCA said the two companies could announce the signing of a binding memorandum early on Wednesday, followed by a conference call to explain further details later in the day.

The two mid-sized carmakers announced plans six weeks ago for a tie-up to help them deal with big challenges in the industry, including a global demand downturn and the need to develop costly cleaner cars to meet looming anti-pollution rules.

Ahead of the meetings, entities representing the Peugeot family, Etablissements Peugeot Freres (EPF) and FFP, unanimously approved a proposed memorandum of understanding for the planned merger, a source familiar with the situation said.

FCA and PSA have said they would seek to finalise a deal by year-end to create a group with 8.7 million in annual vehicle sales.

That would put it fourth globally behind Volkswagen, Toyota and the Renault-Nissan alliance.

PSA's Carlos Tavares will be chief executive and FCA's John Elkann - the scion of Italy's Agnelli family, which controls FCA through their holding company Exor EXOR.MI - chairman of the combined company.

The group will include the Fiat, Jeep, Dodge, Ram, Chrysler, Alfa Romeo, Maserati, Peugeot, DS, Opel and Vauxhall brands, allowing it to serve mass and premium passenger car markets as well as those for trucks and light commercial vehicles.