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On January 4, the extraordinary meetings of the two groups will give the green light to the operation. From the agreement with the French, the fourth largest car manufacturer in the world was born, with a turnover of 180 billion
by Marigia Mangano
On January 4, the extraordinary meetings of the two groups will give the green light to the operation. From the agreement with the French, the fourth largest car manufacturer in the world was born, with a turnover of 180 billion
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The great merger in the automotive world comes to life: on January 4, the main shareholders of PSA and FCA will be convened to deliberate on the operation that will create Stellantis, the fourth largest automaker in the world with 8.7 million cars sold, 400,000 employees and more. 180,000 million euros of turnover. The extraordinary shareholders’ meetings of the two groups, which will be held in streaming due to Covid-19, represent the last step, after the approval of the European Antitrust, in the integration process that began on October 31, 2019. Shareholders will follow the actual closing, which will take place in the coming weeks and represents one of the necessary formalities to proceed with the listing of Stellantis on the Paris, Milan and New York stock exchanges.
The steps prior to formalization
The impression is that the entire process will be completed in a short time with the formalization of the merger scheduled for January. And before it is complete, it will be necessary to continue with those financial steps that are critical to aggregation and part of the big business. First, the coupon distribution provides for rebalancing the weights of the two groups and thus achieve a fair merger.
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The merger plan reviewed by shareholders is the one revised in recent months after the pandemic and resizes the coupons initially assigned to the shareholders of the two groups in the original project at the end of 2019.
In detail, the first version of the agreement envisaged a clear division between the coupons guaranteed to FCA shareholders and the blocking coupons for transalpine shareholders. The marriage generated an extraordinary dividend of 5.5 billion for FCA. For French shareholders, on the other hand, the extraordinary coupon was represented by the shares of Psa’s component subsidiary, Faurecia, of which 46% are held by Psa and whose value is equivalent to 2,700 million.
The new deal released to the market after the summer has lowered both stocks, cash and paper. For FCA, the dividend fell to 2,900 million plus a distribution of Faurecia paper of 1,349 million, equivalent to 23%. The transalpine front is cut roughly the same size.
The role of Faurecia will be distributed to PSA shareholders for 1.35 billion, compared to the 2.7 billion initially expected. On the other hand, liquidity in Stellantis will increase by 2,700 million compared to the first scheme.
In the coming weeks, in parallel to the closing, the expected dividends, 2,900 million cash, will be distributed to FCA shareholders, to which the Faurecia card will later be added. The timetable for the transfer of Faurecia’s titles is unclear, but the outlook will be more detailed on January 4 at the meetings of the two groups.
