On Halloween, news broke that PSA and FCA had agreed in principle to merge. Now the merger is official with both parties having signed a binding merger agreement in a deal worth approximately $47 billion.
The merger creates the fourth largest global original equipment manufacturer by volume and the third largest by revenue. Using 2018 tallies, the two companies accounted for a combined 8.7 million vehicle sales.
This deal allows flexibility of production and future technologies development that both parties were seeking. PSA had previously made it known that it was looking to expand into the Americas, an area where FCA excels in production and sales. FCA has widely been reported as falling behind other automakers in its development and implementation of battery, autonomous, and safety technology.
Click here to see the brands caught up in the merger.
A news release issued by the companies indicated that there are no plans to close any factories and that the company expects to be cash flow positive from the get-go.
The release also touted the company’s plans to deliver “higher customer satisfaction.” The 2018 American Customer Satisfaction Index, which surveys car owners on their overall service and product experience with specific auto brands, found that Ram was FCA’s most satisfying brand for customers, with a 14th place ranking. Jeep came in at 18th, and Fiat at 25th, while Dodge and Chrysler were at the bottom placing 27th and 28th, respectively.
The new company’s board will consist of 11 members. PSA’s Carlos Tavares will be the company’s CEO and a member of the board while FCA’s John Elkann will be chairman of the board. No announcement has been made as to the role of Mike Manley, who has been leading FCA following CEO Sergio Marchionne’s sudden death in July 2018, though FCA confirms that Manley will still have a role in the company.