PSA Groupe and Fiat Chrysler Automobiles have agreed to merge following ongoing discussions.   

Combined, the two companies have created the fourth largest global automotive OEM by volume and the third largest in revenue.   

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They will have annual unit sales of 8.7m vehicles with revenues of approximately €170bn, recurring profit of over €11bn and an operating profit margin of 6.6%.  

Carlos Tavares, chairman of the managing board of Groupe PSA, said: “Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology and services.   

Tavares will be chief executive of the company and hold a seat on the board.   

“I have every confidence that with their immense talent and their collaborative mindset, our teams will succeed in delivering maximised performance with vigor and enthusiasm,” he added.   

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The merger will mean brands including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall will be brought under one umbrella.  

The move follows on from PSA Group’s merger with Opel and Vauxhall last year, which saw Frédéric Brunet and Xavier Duchemin appointed as managing directors on 1 August 2018.  

Mike Manley, chief executive FCA said. “This is a union of two companies with incredible brands and a skilled and dedicated workforce. Both have faced the toughest of times and have emerged as agile, smart, formidable competitors. Our people share a common trait – they see challenges as opportunities to be embraced and the path to making us better at what we do.”  

The merger is expected to take between 12-15 months to complete.   

Before it is completed, China’s Dongfeng Motor Group will cut its 12% stake in Peugeot and sell 30.7m shares to PSA.