French carmaker Peugeot and US-Italian rival Fiat Chrysler have signed an agreement to create the world's fourth largest vehicle manufacturer, according to a joint statement issued on Wednesday.
"Fiat Chrysler Automobiles and Peugeot SA have today signed a binding combination agreement providing for a 50/50 merger of their businesses to create the fourth largest global automotive original equipment manufacturer by volume and third largest by revenue," the statement said, adding that the tie-up would not involve any plant closures.
The combined group will have a workforce of more than 400,000, total revenues of close to 170 billion euros, and annual unit sales of some 8.7 million vehicles of the brands Fiat, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Jeep, Lancia, Maserati, Opel, Peugeot and Vauxhall.
The joint entity will have "the leadership, resources and scale to be at the forefront of a new era of sustainable mobility," PSA and Fiat Chrysler said.
The tie-up will "deliver approximately 3.7 billion euros in estimated annual synergies".
The merger was expected to be completed in 12-15 months, the statement said.
The combined group will be headquartered in the Netherlands, and will continue to be listed on the Paris, Milan and New York stock exchanges.
Fiat Chrysler boss John Elkann will be chairman of the new group, and PSA's Carlos Tavares chief executive.