Automakers PSA and Fiat Chrysler have officially announced their intention to merge. This should, according to car companies, “become a world leader in an era of sustainable mobility”. There have been rumors for some time that the two had reached an agreement.

The French PSA and the Italian-American Fiat-Chrysler each receive half of the shares in the merged company that has its head office in the Netherlands. Fiat Chrysler already has a Dutch headquarters. If the merger continues, car brands Peugeot, Citroën, DS and Opel from PSA and Fiat, Chrysler and Jeep will come under one roof.

The merged company would be worth about $ 49 billion and become the fourth automaker in the world. Only Volkswagen, Toyota and the Renault Nissan combination are even larger.

The boards of the two automakers have agreed to merge. Negotiations on a declaration of intent will continue in the coming weeks. PSA CEO Carlos Tavares will lead the new car giant. His Fiat Chrysler counterpart John Elkann becomes chairman.

Before the merger can be completed, regulators and the shareholders of both parties must still agree. In the event of a merger, the shareholders of Fiat Chrysler receive a special dividend of 5.5 billion. The shareholders of PSA receive the 46 percent interest that the French automaker has in car parts manufacturer Faurecia.