Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Fiat Chrysler, Peugeot maker PSA revise merger terms due to COVID-19 crisis

Coronavirus NewsSep 14, 2020 22:15
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. The logos of car manufacturers Fiat and Peugeot are seen in front of dealerships of the companies in Saint-Nazaire 2/2

PARIS (Reuters) - Peugeot maker PSA (PA:PEUP) and Fiat Chrysler (FCA) said on Monday they had restructured the terms of their planned merger to conserve cash, and also stepped up the promised levels of cost cutting during the continuing pandemic.

The two companies, which are set to merge into Stellantis, the world's fourth-largest carmaker, said in a joint statement that FCA (MI:FCHA) would cut to 2.9 billion euros (2.6 billion pounds) the cash portion of a 5.5 billion euro special dividend its shareholders will receive under the terms of the accord they signed last year.

France's PSA, whose brand portfolio also includes Citroen and Opel, in turn, will postpone after the merger's closing the planned spinoff of its 46% stake in parts maker Faurecia (PA:EPED) to all shareholders of the new group.

Faurecia's market capitalisation amounts to around 5.9 billion euros.

"Amendments preserve the balance of original combination agreement," the two groups said.

A source said on Monday that the aim of those changes was to reinforce the balance-sheet structure of both companies after the COVID-19 crisis and ensure that the merger plan is concluded as soon as possible.

Analysts had argued that such a large cash payout to FCA shareholders, led by controlling investor EXOR (MI:EXOR), the holding company of Italy's Agnelli family, could weaken the new carmaker's finances, as the auto industry was paying a high price for the coronavirus outbreak this year.

Confirming last week that the deal was on track, FCA Chief Executive Mike Manley said both he and PSA CEO Carlos Tavares were aware of the need for the two firms to get to the merger with the strongest balance sheet possible as well as for shareholders to get what they expected.

FCA and PSA said annual estimated synergies from their merger were now seen over 5 billion euros, compared with an initial estimate of over 3.7 billion euros.

The two carmakers confirmed that they expected to complete their tie-up process by the end of first quarter of next year.

Both carmakers earlier this year scrapped dividend payments on 2019 results, each worth 1.1 billion euros.

Fiat Chrysler, Peugeot maker PSA revise merger terms due to COVID-19 crisis
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email