The boards of both companies hve agreed to the merger and a binding MOU is set to be signed in the coming weeks.

On Thursday, in a joint statement, Peugeot’s owner PSA and Fiat Chrysler stated, they would merge by way of a 50-50 share swap to create the world’s fourth-largest automaker.

The joint statement goes on to read, the board of directors of both groups have mandated their respective teams to finalize discussions and reach a binding memorandum of understanding in the coming weeks.

They also said, Fiat Chrysler (FCA) will pay its shareholders a $6.1 billion (5.5 billion euro) special dividend and hand them its shares in Comau, its robot-making business.

The combined company will be chaired by John Elkann and will be based in the Netherlands.

Peugeot’s Chief Executive Carlos Tavares will be the CEO of the combined company.

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Tags: automaker, binding, board, board of directors, Carlos Tavares, CEO, chairman, Comau, FCA, Fiat Chrysler, fourth-largest, John Elkann, M&A, Memorandum of Understanding, merge, mergers and acquisition, MOU, Netherlands, Peugeot, PSA, share swap, special dividend