PSA and FCA sign ‘prenup’
Fiat Chrysler Automobiles (FCA) and PSA Group have signed a ‘prenuptual’ agreement, stipulating the terms and conditions of their future merger. These include:
- The new company will be led by Carlos Tavares (pictured), CEO of PSA, while John Elkann, Chairman of FCA, will retain his title after the merger.
- The Board of Directors will number 11 people, five from each company (including labour representatives).
- Tavares will take the 11th seat. His mandate as CEO will last five years.
- No shareholder will have more than 30% of the votes at shareholder meetings.
The merged company will be the world’s fourth-largest car manufacturer, behind VW Group, Toyota and Renault-Nissan, but ahead of Ford. It will have a stock-market value of around $47 (€42) billion. The merger will also unite two legendary auto-making families, the Agnellis of Italy and the Peugeots of France.
The deal, which will take at least a year to finalise, will give both companies something they lack: PSA a presence in the US and FCA access to low-emission technology. The new company does not have a name yet. The two companies said they would come up with one in the coming months.
The merger will generate cost savings of around $4 (€3.7) billion. That estimate does not include any factory closures. FCA and PSA jointly sold around 8.7 million vehicles in 2019 – well below their manufacturing capacity of 14 million. The companies have a combined global workforce of 400,000.
