Fiat Chrysler (FCA) and PSA said they aimed to reach a binding deal to create a $50 billion company domiciled in the Netherlands, with listings in Paris, Milan and New York and with PSA’s Carlos Tavares as CEO and FCA’s John Elkann as chairman.
FCA shares jumped as much as 11% in early trade to hit a one-year high of 14.248 euros.
The deal aims to make savings of 3.7 billion euros ($4.1 billion), without plant closures, and achieve around 80% of that within four years, at a one-off cost of 2.8 billion euros.
The multi-brand group will include the Fiat, Jeep, Dodge, Ram, Chrysler, Alfa Romeo, Maserati, Peugeot, DS, Opel and Vauxhall brands, allowing it to serve mass and premium passenger car markets as well as trucks and light commercial vehicles.
The combined group will have an 11-person board, with six members coming from PSA including Chief Executive Tavares, and five from FCA including Chairman Elkann.
FCA is being advised by Goldman Sachs

and D’Angelin, while PSA is working with Morgan Stanley, Mediobanca’s Messier Maris & Associes unit and Perella, sources close to the deal said.