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Fiat Chrysler Automobiles NV and Peugeot SA have signed a binding agreement to move forward with their $50 billion tie up, the two companies said Wednesday.
The Wall Street Journal reported Tuesday that Peugeot’s UG, +0.87% board backed a binding merger agreement with Fiat Chrysler FCA, +0.00% FCAU, +1.52%. The two companies said Wednesday that long-term shareholders EXOR NV EXO, +0.00%, Bpifrance, the Peugeot family and China’s Dongfeng 489, -0.51% have all committed to vote in favor of the deal at the companies’ respective extraordinary general meetings.
Under the signed agreement, Fiat Chrysler will hold on to its Comau division until after completion of the deal and separate it “promptly” after, for the benefit of the new company’s shareholders. Fiat Chrysler and Peugeot said China’s Dongfeng Group has agreed to sell 30.7 million Peugeot shares back to Peugeot, reducing its stake in the merged company to 4.5%, confirming the earlier report in The Wall Street Journal.
Fiat Chrysler and Peugeot agreed to the tie-up at the end of October. Under the agreement each company’s shareholders will own 50% of the new entity. Peugeot Chief Executive Carlos Tavares will be CEO and Fiat Chrysler’s John Elkann will remain chairman.
The completion of the deal is expected in 12 to 15 months.
