Fiat Chrysler and Peugeot confirm the agreement to merge
A Jeep Renegade 4×4 e will be presented at the Geneva Motor Show on March 5, 2019. Signage in the background says "& # 39; FCA Fiat Chrysler Automobiles," to which the Jeep belongs.
Uli Deck | image alliance | Getty Images
Peugeot (PSA) and Fiat Chrysler on Thursday confirmed their intention to merge, in what would be a 50-50 stock swap.
"Discussions have opened the way for the creation of a new group of global scale and resources owned 50% by Groupe PSA shareholders and 50% by FCA shareholders," they said in a statement.
"In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage the strong global R&D footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency."
The PSA Board approved the merger and the Fiat Chrysler Board met on Wednesday. Executives have briefed regulators in the United States and France, reported the Wall Street Journal and cite named sources.
Reports on the talks, including a potential "merger of all equities shares," as the Wall Street Journal first reported, sent shares of Fiat Chrysler rising as much as 8% on Tuesday. The stock rose by less than 2% in midday trading on Wednesday.
The confirmation of the deal comes about five months after Fiat Chrysler ended merger discussions with PSA's French rival, Renault. However, the new merger is unlikely to have the same interference from the French government, a source told CNBC.
—CNBC's Michael Wayland and Phil LeBeau contributed to this article.
