Italian-American automaker Fiat Chrysler Automobiles N.V. (FCAU) and Peugeot's (PUGOY) parent company Groupe PSA have officially signed a merger, the two companies said in a joint statement on Wednesday.

What Happened

Both Fiat Chrysler and PSA will own a 50% stake each in the combined company, which will have an estimated revenue of about $189.2 billion and an operating profit margin of 6.6% based on the companies' individual 2018 performance.

The statement said the combined company would be the world's fourth-largest automaker in terms of volume, and the third-largest in terms of revenue.

The new company will be domiciled in the Netherlands. Its stock will list at the New York Stock Exchange in the U.S., at Euronext N.V. in France, and the Borsa Italiana S.p.A. in Italy.

Fiat Chrysler's chairman and a descendant of Italy's Agnelli family, John Elkann, will continue in his role at the new company, while PSA's chairman Carlos Tavares will take over as the chief executive officer.

"Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology, and services," Tavares said on the merger.

Price Action

Fiat Chrysler's shares closed 1.52% higher at $15.33 on Tuesday. Peugeot's shares closed 0.88% higher at $24.70 in the OTC market.