The supervisory board of French carmaker PSA on Tuesday approved a mega-merger with Fiat-Chrysler to create the world's fourth-largest auto producer, a source close to their talks said. Under the deal, shareholders in the two groups would split the capital of the merged firm on a 50/50 basis to form a global sector behemoth without any plant closures, according to the source. "PSA's supervisory board has approved the merger agreement," the source told AFP on condition of anonymity. PSA group, which makes the Citroen and Opel brands, for its part did not confirm the approval when contacted by AFP.
The deal is touted as creating a $50 billion entity. The Peugeot family had given its blessing Monday. An informed source in Italy added that the board of Fiat Chrysler Automobiles would later be meeting with a view to giving their own approval. The board of the merged company will reportedly comprise 11 members, six from PSA and five from FCA.
The French state has backed a deal that Paris -- having earlier rejected a Renault merger with Fiat in the absence of a green light from the latter's Japanese partner Nissan -- believes will garner sufficient investment to launch electric and self-driving vehicles. That investment is set to surpass tens of billions of dollars.The new company will employ more than 400,000 people. Current combined annual brand sales top 8.7 million units covering Fiat, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Jeep, Lancia, Maserati, Opel, Peugeot and Vauxhall.