PARIS (Reuters) – Peugeot maker PSA PEUP.PA and Fiat Chrysler (FCA) stated on Monday they had actually reorganized the regards to their planned merger to save money, and likewise stepped up the guaranteed levels of cost cutting during the continuing pandemic.
The two business, which are set to combine into Stellantis, the world’s fourth-largest carmaker, said in a joint statement that FCA FCHA.MI would cut to 2.9 billion euros ($ 3.4 billion) the money part of a 5.5 billion euro special dividend its investors will get under the regards to the accord they signed last year.
France’s PSA, whose brand name portfolio also consists of Citroen and Opel, in turn, will postpone after the merger’s closing the planned spinoff of its 46%stake in parts maker Faurecia EPED.PA to all shareholders of the brand-new group.
Faurecia’s market capitalisation totals up to around 5.9 billion euros.
” Modifications preserve the balance of initial mix arrangement,” the 2 groups stated.
A source stated on Monday that the aim of those changes was to strengthen the balance-sheet structure of both companies after the COVID-19 crisis and guarantee that the merger strategy is concluded as quickly as possible.
Analysts had actually argued that such a large cash payment to FCA investors, led by managing investor EXOR EXOR.MI, the holding business of Italy’s Agnelli family, might weaken the brand-new carmaker’s financial resources, as the car market was paying a high cost for the coronavirus outbreak this year.
Validating last week that the deal was on track, FCA Chief Executive Mike Manley stated both he and PSA CEO Carlos Tavares understood the requirement for the two companies to get to the merger with the strongest balance sheet possible along with for shareholders to get what they anticipated.
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 validated that they expected to finish their tie-up process by the end of very first quarter of next year.
Both carmakers previously this year ditched dividend payments on 2019 results, each worth 1.1 billion euros.
Reporting by Gilles Guillaume in Paris and Giulio Piovaccari in Milan; Editing by Valentina Za and Peter Cooney
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