The proposed super-merger between the keen French and Italian-American giants, with a combined 410,000 direct employees, would create a new group half-owned by each party with equal board representation. Fiat Chrysler CEO Mike Manley would have a senior executive role and work closely with Tavares. The merger will take place under a Dutch parent company with a balanced governance structure across the two shareholder groups, including a majority of independent board members. The Financial Times reports that emerging technologies make these deals even more important since one company may lack the necessary resources to make needed investments.
The merger, once completed, is expected to generate 3.7 billion euros ($4.1 billion) in annual synergies, without any plant closures, they said.
Leonardi also said that Fiat-Chrysler's strength in mid-level and premium markets and, through the Dodge and Ram names in small trucks and sports vehicles, will be complemented by Peugeot's strength in economical and luxury sectors with the company's e-208 electric vehicle. However, the United States automaker pulled out of the deal following pushback from the French government (a major Renault shareholder) and the automaker's alliance partner Nissan.
"I'm delighted by the opportunity to work with Carlos and his team on this potentially industry-changing combination", said Manley.
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"This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity".
The emerging company will be registered in the Netherlands, while also maintaining head-office locations in France, Italy, and the US. Fiat Chrysler's board meeting was still in progress while the board of Exor, the Agnelli family holding company that controls the Italian-American auto maker, was scheduled to meet later on Wednesday night.
Meanwhile, Fiat Chrysler would gain access to the PSA's electric vehicle technology.
The board will be made up of 11 members, with six from the PSA side including Chief Executive Officer Carlos Tavares, who will lead the new company, the statement confirmed. The shareholders of PSA receive the 46 percent interest that the French automaker has in vehicle parts manufacturer Faurecia.