MILAN/PARIS (Reuters) - Fiat Chrysler (FCHA.MI) and Peugeot owner PSA (PEUP.PA) plan to join forces through a 50-50 share swap to create the world’s fourth-largest automaker, they said on Thursday, triggering a new wave of consolidation in the car industry.Fiat Chrysler (FCA) and PSA said they aimed to reach a binding deal to create a $50 billion company domiciled in the Netherlands, with listings in Paris, Milan and New York and with PSA’s Carlos Tavares as CEO and FCA’s John Elkann as chairman.
The move comes less than five months after FCA abandoned merger talks with PSA’s French rival Renault (RENA.PA) and would give both companies the scale to help manage a global downturn in auto markets as well as costly investments in new technologies such as electric and self-driving vehicles.
FCA would get access to PSA’s more modern vehicle platforms, helping it to meet tough new emissions rules, while Europe-focused PSA would benefit from FCA’s profitable U.S. business.