Fiat Chrysler and Vauxhall's owner agree $50bn merger deal

Fiat Chrysler and PSA, the owner of Vauxhall, have agreed a merger to create the world's fourth-largest automaker.

The tie-up, creating a company worth $50bn (£38.1bn), was announced as the industry races to lead an expensive, new electric vehicle future as sales of conventionally-powered cars tumble globally.

The firms said they aimed to "successfully capitalise on the opportunities presented in the new era of sustainable mobility".

The proposals for the 50:50 merger, expected to be completed in a year's time, were first announced in October.

The companies, which said they were yet to agree a name for the new entity, confirmed on Wednesday it would involve no plant closures despite £3.1bn in annual savings being targeted.

That will provide some comfort for PSA's 5,000 staff in the UK - 2,000 of them at Vauxhall's two plants at Luton and Ellesmere Port in Cheshire.

The French firm, which also includes the Peugeot and Citroen brands in its stable, has previously called into question the futures of the Vauxhall factories.

It warned in July that plans to make the next generation Astra at Ellesmere Port were conditional on Brexit and union conditions.

The GMB trade union said on Wednesday that it was seeking guarantees on the long-term future of the UK plants.

Fiat Chrysler and PSA said the new group will be led by the French firm's chief executive, Carlo Tavares, with Fiat Chryslers chairman John Elkann as chairman.

The combined group currently produces 8.7 million cars a year - just behind Toyota, Volkswagen and the Renault-Nissan alliance.

It said the savings achieved by the tie-up, through shared investments in technology, would be invested in "the new era of sustainable mobility'' to meet strict new emissions regulations around the globe.

Shares in PSA rose more than 1% on the news, despite much of the detail already being in the public domain, while Fiat Chrysler was little changed.