Italian Prime Minister Giuseppe Conte welcomed the planned merger of Fiat Chrysler with its French rival PSA in an newspaper interview on Thursday, but said protecting jobs would be a top priority.

“It can be a great opportunity for Italy and Europe,” Conte told the daily La Stampa. He said the deal to create the world’s fourth-largest automaker and develop environmentally friendly models would help the integration of European industry.

Speaking ahead of a meeting between Fiat Chrysler’s (FCA) management and Italian union representatives on Friday, Conte said the deal should have no negative impact on jobs.

“The guarantee that employment levels will be protected and maintained has been put down in black and white in the joint statement by FCA-PSA,” he said.

“For this government, protecting job stability is crucial,” he added.

FCA has said it expects 3.7 billion euros ($4.1 billion) in annual synergies from the merger with no plant closures.

Unions have also welcomed the decision of the two automakers to include two union representatives - one from Italy and one from France - on the 11-strong board of the merged group.

Analysts expect the companies’ factories in Europe, which stretch from Portugal to Britain, to draw scrutiny because they have overlapping brands and underutilised factories.

FCA’s underused plants in Italy employ some 58,000, more than a quarter of its workforce.

French carmaker PSA and US-Italian rival Fiat Chrysler said Wednesday they had agreed on the terms of a merger to create the world’s fourth-largest automaker as the industry grapples with the costly and complicated transition to cleaner and more sustainable mobility.

“Fiat Chrysler Automobiles and Peugeot SA (Groupe PSA) have today signed a binding combination agreement providing for a 50/50 merger of their businesses to create the fourth largest global automotive original equipment manufacturer by volume and third largest by revenue,” the statement said.

It added there would be “no plant closures resulting from the transaction.” Ranking behind global rivals Volkswagen, Renault-Nissan-Mitsubishi and Toyota, the combined group will have a workforce of more than 400,000, total revenues of close to 170 billion euros ($190 million) and annual unit sales of some 8.7 million vehicles.

Its brands will include Fiat, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Jeep, Lancia, Maserati, Opel, Peugeot and Vauxhall.

The joint entity will have “the leadership, resources and scale to be at the forefront of a new era of sustainable mobility,” PSA and Fiat Chrysler said.

The tie-up − which the two sides had originally agreed to at the end of October − will “deliver approximately 3.7 billion euros in estimated annual synergies” or cost savings.

The merger was expected to be completed in 12-15 months, the statement said.

 - ‘Huge opportunity’ - Fiat Chrysler chief John Elkann will be chairman and PSA’s Carlos Tavares chief executive.

“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,” Tavares said in a statement.

“Our two companies − both of which are succesful examples of family entrepreneurship that has survived from generation to generation − have contributed to defining our industry since its origins more than a century ago,” Elkann wrote in a letter to staff.

The combined group − which has yet to be given a name − would be headquartered in the Netherlands, and continue to be listed on the Paris, Milan and New York stock exchanges.

The lion’s share of the savings will be generated in the joint development of technology, products and platforms, as well as in purchasing, but also in marketing, IT systems and logistics, the statement said.

“Those synergies will enable the combined business to invest significantly in the technologies and services that will shape mobility in the future while meeting the challenging global CO2 regulatory requirements.” - ‘Sizeable overlap’ - Analysts nevertheless argue that the two companies are still too dependent on the declining European market and lack a strong presence in China.

“Both are weak in China, the world’s largest car market, while their centre of gravity is in the mature European market,” said Nick Oliver, a professor at University of Edinburgh Business School.

Agencies