The PSA Group and Fiat Chrysler Automobiles have signed a “binding combination agreement” providing for a 50/50 merger of their businesses.

The firms say the resulting combined company will be the fourth-largest global automotive OEM by volume (and the third largest by revenue). Completion of the proposed combination is expected to take place in 12 to 15 months.

At the end of October 2019, the two automakers officially announced plans to merge. For the record, the PSA Group runs the Peugeot, Citroën, DS, Opel and Vauxhall brands, while FCA’s portfolio includes Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati and Ram, with Ferrari spun off from the group in 2016.

“The gains in efficiency derived from larger volumes, as well as the benefits of uniting the two companies’ strengths and core competencies, will ensure the combined business can offer all its customers best-in-class products, technologies and services and respond with increased agility to the shift taking place in this highly demanding sector,” PSA and FCA said in a joint statement.

According to the firms, the combined company will have annual unit sales of about 8,7 million vehicles, with revenues of nearly €170-billion, recurring operating profit of over €11-billion and an operating profit margin of 6,6 percent.

Interestingly, the statement added that more than two-thirds of run rate volumes will be concentrated on two platforms, with approximately three million vehicles per year on each of the small platform and the compact/mid-size platform.

The proposed board of the new company Dutch-domiciled parent is set to be composed of 11 members. The two automotive groups agreed that five board members will be nominated by FCA and its reference shareholder (including John Elkann as chairperson) and five by PSA and its reference shareholders (including the senior non-executive director and the vice chairperson). Carlos Tavares is in line to be chief executive officer for an initial term of five years (as well as a member of the board).