FCA And PSA Group Amend Their 50/50 Merger Due To Covid-19

Cornelia Mascio
Settembre 16, 2020

Peugeot maker PSA and Fiat Chrysler (FCA) have restructured the terms of their planned merger to conserve cash, and also stepped up the promised levels of cost cutting during the pandemic.

FCA and PSA, which a year ago agreed to merge to give birth to Stellantis, the world's fourth largest vehicle manufacturer, said late on Monday they had amended the accord to conserve cash and better face the COVID-19 challenge to the auto sector.

Under the revised terms, FCA will cut from 5.5 billion euros ($6.5 billion) to 2.9 billion euros the cash portion of a special dividend its shareholders are set to receive on conclusion of the merger.

However, PSA will for its part delay the planned spinoff of its 46% stake in auto parts maker Faurecia until after the deal is finalized.

"Of the two, FCA might be a bit more of a victor in the short term given the structure of the deal and the numerous payouts to shareholders to come in the quarters ahead (potentially close to 5 billion euros versus the current capitalization of around 16 billion euros)".

Thanks to the amendments, FCA's and PSA's respective shareholders will receive equal 23 per cent shares in Faurecia.

Both companies have this year scrapped dividend payments on 2019 results, each worth 1.1 billion euros, as the sector grapples with the pandemic which has sent vehicle sales plunging.

"Today's announcement is a further, strong signal of a common determination to ensure that Stellantis has all the resources it needs to apply its unique assets, its creative energies and many opportunities to the creation of superior value for all our stakeholders", FCA chief executive Mike Manley said.

The two carmakers confirmed that they expect to complete the tie-up process by the end of the first quarter of 2021. "The human factor is at the heart of the dynamic of such a project, together with the support of our shareholders who have once again demonstrated their commitment to the creation of Stellantis". "I would like to take this opportunity to warmly thank the teams who have built reciprocal relations of trust, including during the COVID-19 confinement".

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE