By Ben Dummett, Eric Sylvers and Nick Kostov 

Fiat Chrysler Automobiles NV and Peugeot maker PSA Group of France have agreed on the terms of a merger that, if approved by both boards, would create the world's fourth-largest auto maker by volume with a market value of more than $48.4 billion, according to people familiar with the situation.

Peugeot's board approved the deal on Wednesday. Fiat Chrysler's board meeting was still in progress while the board of Exor, the Agnelli family holding company that controls the Italian-American car maker, was scheduled to meet later on Wednesday night.

Fiat Chrysler Chairman John Elkann would become chairman of the newly merged company while Peugeot Chief Executive Carlos Tavares would be CEO. Both would have seats on the board of the new company, which would comprise six Peugeot appointees, including Mr. Tavares, and five from Fiat Chrysler.

As part of the deal, Peugeot would pay EUR3 billion to its shareholders from the sale of a stake in auto parts maker Faurecia, while Fiat Chrysler will pay its shareholders a dividend of EUR5 billion and would also distribute the proceeds from the sale of its Comau unit, which is valued at about EUR250 million.

The U.S. and French governments have been briefed on the deal.

Issues yet to be clarified include where the joint company would be based and the size of the stakes owned by the companies' major shareholders.

A spokesman for PSA declined to comment. A spokesman for Fiat Chrysler couldn't immediately be reached for comment.

--Nick Kostov and Ben Dummett contributed to this article

Write to Eric Sylvers at eric.sylvers@wsj.com

 

(END) Dow Jones Newswires

October 30, 2019 15:32 ET (19:32 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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