DETROIT — Fiat Chrysler and Peugeot agreed Wednesday to merge into a single company that will become the world’s fourth-largest automaker, a giant that could bring consumers a wider variety of cleaner vehicles at a faster pace, including more powered by electricity.
The boards of the two companies signed the deal to achieve what neither was good at alone: conquering the challenges of stricter emission rules and navigating the transition to battery-powered and autonomous vehicles.
The new company, which doesn’t yet have a name, will be led by Peugeot CEO Carlos Tavares. Fiat Chrysler CEO Mike Manley will stay on, though it was unclear in what capacity.
For consumers, the agreement will give Fiat Chrysler access to “multi-energy platforms” already developed by Peugeot, including electric vehicles, Manley said.
“That obviously increases choice and improves overall fleet performance from a CO2 perspective,” he said. “In any competitive environment, you win because you offer your customers great value.”
But don’t expect to see Peugeot sedans in the U.S. anytime soon. Tavares said the combined company’s brands would stay where they originated.
The deal, long sought by both corporations, is expected to close within 15 months, although it will have to clear antitrust and other regulatory hurdles.
By themselves, the companies were relatively weak in new technology, such as electric vehicles, with Peugeot ahead of Fiat Chrysler. But together, they will be able to turn out more plug-in hybrids and electric vehicles.
“In going this route, they should be more affordable,” said Stephanie Brinley, principal analyst for IHS Markit. “Consumers should be able to get it faster, and they should be able to get it at a lower cost.”