Paris (AFP)

The groups PSA and Fiat-Chrysler Automobiles announced Thursday the agreement unanimously of their two boards of directors on a project of fusion.

Here are five things to know about this wedding announced.

Between equals

The two car manufacturers PSA and Fiat-Chrysler agreed on the principle of a merger of the two groups where each would hold 50% of the capital.

The "fruits of this rapprochement" would also be shared equally. If they meet, PSA and FCA will become the world's fourth largest manufacturer with 8.7 million vehicles sold annually and a consolidated turnover of 170 billion euros.

Fiat-Chrysler intends to distribute an exceptional dividend of 5.5 billion euros and its stake in Comau to the owners of its capital.

For its part, PSA would distribute to its shareholders its shares of Faurecia, which represent 46% of the capital of the French automotive supplier.

Netherlands

The parent company of this new entity would move to the Netherlands. John Elkann, current president of FCA and heir to the founding family Agnelli, would chair the new board of directors, while Carlos Tavares would become managing director of the merged group.

The new board of directors would be composed of eleven members: five appointed by Fiat-Chrysler, five by PSA, the eleventh being Carlos Tavares.

The Netherlands is also the country chosen by the Renault-Nissan-Mitsubishi alliance to establish the headquarters of their automobile group, third in the world market. To note: Carlos Tavares made his whole career at Renault before being ejected in 2013 by his great rival Carlos Ghosn.

Factories

By pooling their efforts, the two manufacturers could create € 3.7 billion in synergies, to be implemented, in large part, within four years. And this without closing of factory.

The Franco-Italian-American construction potential will remain listed on stock exchanges in Paris, Milan and New York. It would retain "a significant presence in the operational seats" of Peugeot, Fiat and Chrysler.

For now, the project seems to be favored by the French state, shareholder 12% of PSA, which welcomes "the idea", according to the Minister of Economy Bruno Mayor. The government will nevertheless remain "particularly vigilant" on the maintenance of the industrial apparatus in France.

Family Affairs

The two groups were created by entrepreneurs whose families still hold part of the capital to date: in 1896 for Peugeot, by Armand, the first of the name, which separates the automotive business from the industrial company Peugeot Frères, even founded in 1810, and 1899 for Fiat, by Giovanni Agnelli.

© 2019 AFP