Following the initial announcement six weeks ago, Fiat Chrysler and Peugeot reached a merger agreement this week.
This $50 billion merger will result in the fourth largest car maker on the planet.
This merger will help both companies reach stringent emissions legislation, as well as cut development cost. According to the car makers, the saving will be somewhere in the $4 billion region.
Before the merger can be completed, Dongfeng Motor Group will have to sell its 12.2% stake in Peugeot.
The new company, which doesn’t have a name yet, will be managed by a board consisting of five members from FCA and five members from PSA.
The final seat is reserved for current PSA boss, Carlos Tavares. Tavares will be the CEO of the merged company for the first five years.