PARIS/MILAN (Reuters) – Fiat Chrysler (FCA) (FCHA.MI) and Peugeot maker PSA (PEUP.PA) said on Wednesday they had agreed on a binding merger in a $50 billion deal that will pave the way to the creation of the world’s fourth-largest car maker.
The two mid-sized auto firms, which are yet to decide on a name for their new company, announced plans six weeks ago for a tie-up that will reshape the global industry, as car manufacturers grapple with a global downturn in demand.
Car makers also face steep costs to develop cleaner models as more stringent emission targets set in.
The PSA-FCA merger – which is aiming for annual cost savings of 3.7 billion euros ($4 billion) by combining technologies and through shared purchasing agreements – is expected to close in the next 12 to 15 months, the auto firms said in a statement.
Before the 50-50 share merger is completed, one of PSA’s shareholders, China’s Dongfeng Motor Group (0489.HK), will trim its 12.2% stake in the French car maker…
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