PSA Peugeot Citroen Chief Executive Carlos Tavares delivers a speech during the presentation of the companys 2018 full year results, in Rueil Malmaison, west of Paris, Tuesday, February 26, 2019.Thibault Camus / Getty The board of French carmaker PSA Group has approved a plan to merge with Italian-American rival Fiat Chrysler Automobiles, a combination that would create one of the worlds largest auto manufacturers, according to people familiar with the matter.The new board would be made up of 11 members, with six from the PSA side including Chief Executive Officer Carlos Tavares, who will lead the new company. Fiat Chairman John Elkann would take the same role at the enlarged group.Fiat Chryslers directors are scheduled to meet later Wednesday to discuss the proposal, the people said. The plan authorized by PSAs board calls for negotiations of a binding memorandum of understanding that could last several weeks, said one of the people. A representative for PSA, the maker of Peugeot and Citroen cars, declined to comment. A Fiat spokesman wasnt immediately available to comment.A merger of Fiat Chrysler and PSA, the No. 2 for car sales in Europe, would create a regional powerhouse to rival Volkswagen, with a stock-market value of about US$49 billion comparable to Japans Honda. The tie-up would also bring together two auto-making dynasties, the billionaire Agnelli clan in Italy and the Peugeot family of France.The merger plan comes several months after Fiat Chrysler and PSA explored a partnership on pooling investment to build cars in Europe, and following the collapse in June of negotiations between the Fiat and French competitor Renault SA.Automakers face tremendous pressure to pool their resources for platform development, manufacturing and purchasing as they battle through trade wars, a global slowdown and an expensive shift toward electrification and autonomous driving. Producers face the additional burden in Europe of new rules on emissions.Against this backdrop, the pace of dealmaking has picked up. Volkswagen in July said it will work with Ford on electric and self-driving car technology, while Toyota is strengthening ties with partners such as Subaru and Chinas BYD. The Indian conglomerate that owns Jaguar Land Rover has said its open to finding partners for the British automaker but isnt planning on selling the embattled unit.Tavares has sought to re-establish Peugeots foothold in the U.S., a market it exited in 1991. He set plans earlier this year for a return, with shipments starting from Europe or China in 2026.Fiat Chrysler is seen as a laggard in new technologies such as electrification and autonomy, which are expected to cost automakers billions of dollars over the next decade.The company has sought to secure its future with a larger partner for several years, dating back to late CEO Sergio Marchionnes failed courtship of General Motors. After being rebuffed by GM in 2015, rumors of talks with other automakers have swirled with varying
Origin: Peugeot board approves Fiat Chrysler merger plans, says report