Oct. 31 (UPI) -- Fiat Chrysler and Peugeot said Thursday they have opened a path to a merger -- which would create the world's fourth-largest automaker, with 400,000 employees and $190 billion in net sales.
"Discussions have opened a path to the creation of a new group with global scale and resources owned 50 percent by Groupe PSA shareholders and 50 percent by FCA shareholders," the companies said. "In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage its strong global R&D footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency."
The combined automaker would be worth roughly $50 billion and list on stock exchanges in New York, Paris and Milan, Italy, they said. The automaker would be based in the Netherlands at Fiat Chrysler headquarters. FCA Chairman John Elkann and and Peugeot CEO Carlos Tavares would have the same roles at the new company.
A merged FCA-Peugeot would be the fourth-largest automaker in the world behind Volkswagen Group, Renault-Nissan and Toyota. General Motors would rise to fifth. The companies said they expect to achieve 80 percent of the synergies within four years.
In France, where Peugeot is based, the government has endorsed the deal as long as it can protect local manufacturing.
"This merger is a response to the automotive sector's need to consolidate in order to face the challenges of mobility in the future," French Finance Minister Bruno Le Maire said. "France should be proud of its car industry, which has demonstrated its capacity for research and technological innovation in the fields of electric and hybrid [vehicles]."
Amid reports of a merger, FCA stock gained 13 percent in value Tuesday and Wednesday.