FCA and PSA review the agreement, maxi dividend in cash and assets

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FCA and PSA review the economic conditions of the great agreement that will give life to the creation of the fourth world automobile group. As Il Sole24 Ore anticipated on July 3, in recent months a debate has been opened between the parties on how to change the nature of the maximum extraordinary dividend of 5.5 billion euros that FCA must pay to its shareholders based on the signed contract. late last year. A step that could obviously tighten the financial structure of the new group that will emerge from the merger between the two automakers, especially since the Covid 19 pandemic has severely tested the strength of the two groups.

Hence the search for alternative solutions to the release of the cash coupon that have been identified in a series of steps that reduce the cash outlay by FCA pre-merger. In particular, as announced in an evening FCA note confirming the rumors published by Il Sole 24 Ore, the special dividend that FCA will distribute to its shareholders falls from 5.5 billion to 2.9 billion, while PSA’s 46% stake in Faurecia ( the auto components group) will be distributed to all Stellantis shareholders immediately upon closing of the transaction.

FCA and PSA shareholders will receive an equivalent 23% stake in Faurecia, while their 50% stake in Stellantis, which will now have 2.6 billion euros more liquidity on its balance sheet, will remain unchanged. Finally, it was agreed that the Boards of Directors of PSA and FCA will evaluate a potential distribution of 500 million to the shareholders of each company before closing or, alternatively, a distribution of one billion to be paid after the closing to all Stellantis shareholders. . These decisions – the note concludes – will be taken in light of the performance and prospects of both companies, market conditions and the performance recorded in the interim period.

Estimated annual synergies when fully operational increase to more than 5 billion annually. The transaction is expected to be completed by the end of the first quarter of 2021.

Psa’s French shareholders, unlike FCA shareholders, have provided a coupon “tied” to the spin-off value of Psa’s 46% stake in Faurecia as part of the merger: that stake on the occasion of the announcement, for So much at the end of last year, it was worth 2.7 billion.