Fiat Chrysler and Peugeot owner agree to merge in mega auto deal – CNN, CNN

London (CNN Business)Fiat Chrysler and Peugeot owner PSA Group have announced the terms of a merger that would create a new trans -Atlantic automaking giant with roughly 410, 000 employees and combined revenues of $ 190 billion.

Shareholders of each automaker would own 50% of the combined operation, the companies said in a joint statement on Thursday. A binding agreement could be finalized within weeks, the statement said.

The combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler. John Elkann, the current chairman ofFiat ChryslerFCAU), would perform the same role at the combined company, while PSA Group chief executive Carlos Tavares would be CEO.

The company would rank among the largest automakers in the world. Fiat Chrysler andPSAPUGOY)sold a combined 8.7 million vehicles last year, just ahead ofGM(GM), which sold 8.3 million, and not far behind Volkswagen((VLKAF)and (Toyota)(TM

), which each sold over (million.

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The merger comes amid a global sales slowdown. At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe. The autonomous vehicles of the future also present a threat to traditional industry business models.

The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets.

“We view the combination of these two companies as reasonable given global competition, high capital intensity, and industry disruption from electrified powertrain as well as autonomous technologies,” Richard Hilgert, a senior equity analyst at Morningstar, said in a research note on Wednesday.