Italian-American car maker Fiat Chrysler Automobiles (FCA) and the French Groupe PSA was signed on Wednesday a binding agreement to merge, said the company. The Board of Directors has approved the main parameters of the merger in late October.
the Shareholders of FCA and PSA will receive 50% of the shares of the merged company. The head of the combined company with the authority for five years, will become CEO PSA Carlos Tavares. The Chairman of the FCA John Elkan will chair the Board of Directors, which will consist of 11 members: five Directors from FCA and PSA plus Tavares on the rights of the head of the company, most Directors (at least 5 of the 9) will be independent, the statement reads. In a statement, the manufacturers do not mention the future role of FCA CEO Mike Manley, but he will get a new position in the merged company, said in a letter to employees of the company Elkan. The name for the combined company yet, the automakers will come up with it in the coming months.
the combined company will become the fourth largest car manufacturer in the world after Volkswagen, Toyota and Renault-Nissan Alliance – with sales of 8.7 million cars a year and overtake Ford Motor. The merger also brings together two automotive dynasty – clan the Italian billionaire Agnelli (the main owners of the FCA) headed by Elkan and the French family Peugeot.
the Capitalization of the new auto giant is estimated at $47 billion Total revenue of the merging companies for the last year amounted to about 170 billion euros, current operating income – more than 11 billion euros and an operating margin of 6.6 percent, the report says. The parent company of the new group will be registered in the Netherlands, the shares will be quoted on the stock exchanges of Paris, Milan and new York.
Who stands at the helm of the giant new Company that will combine, Fiat Chrysler and PSA, will yield only Volkswagen, Toyota and Renault-Nissan Alliance Cars
After the completion of the transaction, the shareholders of PSA will receive 1,742 shares of the new company for each share of PSA and FCA shareholders will receive 1 share of the new organization on every share of FCA. To complete the transaction FCA will distribute to shareholders an exceptional dividend of 5.5 billion euros, while PSA will distribute to its shareholders a 46% stake in parts maker Faurecia, the cost of which is estimated at 3.2 billion euros. Also FCA will share its stake in the manufacturer of Comau robots and sell to the shareholders of the new company after the merger is completed.
the Largest shareholders of the merging companies EXOR (family business Agnelli), Bpifrance (representing the French state) and EPF/FFP (Peugeot family) will block its shares in the new company for three years. An exception is made for Bpifrance, which allowed to reduce its stake to 5% in the PSA (or 2.5% in the combined company). Chinese Dongfeng Motor Group will reduce by 12.2% stake in the French automaker, sold 30.7 million shares of PSA (these shares will be cancelled on the closing price of Tuesday the stake was worth 679 million euros, $748,4 million), thus, Dongfeng will own 4.5% of the combined group. It is believed that the decline in the share of Dongfeng will help to obtain the approval of the transaction by US regulators. The administration of President trump was going to check the proposed merger due to the presence in the transaction of the Chinese automaker, reported in November, his economic Advisor Larry Kudlow. EPF/FFP will be allowed to increase its stake up to a maximum of 2.5% of the combined company (or 5% in the PSA) by purchasing shares from Bpifrance, Dongfeng, or in the market, the report said companies.
“the Family is a plus, it’s not just the shareholders,” John Elkann reforming family investment company Exor, as a result, the business dynasty of the Agnelli less inclined to Italy and to the industry Finance
No shareholder of the United the company will not be entitled to use more than 30% of the votes cast at shareholder meetings. The existing rights of double vote (given according to French law, the benefits of long-term shareholders) will not be transferred to the new company, but similar new rights will vest three years after the completion of the merger. Every company in 2020 is going to distribute dividends in the amount of 1.1 billion in the 2019 financial year after the approval of the boards of Directors and shareholders.
the Company intend to complete the merger for a period of 12 to 15 months, with the approval of shareholders and regulators. EXOR, Bpifrance, EPF/FFP and Dongfeng pledged to vote for the transaction at meetings of shareholders of FCA and PSA, the report said.
the Merger will give about 3.7 billion euros of synergies in year provided that the transaction will not be closed out of production. Approximately 40% of synergies will be achieved through the combination of vehicle platforms, engine families and high-tech components while increasing the scale of production. More than two thirds of cars will be produced on two platforms, about 3 million cars a year each. It will be a platform for small and compact/midsize cars PSA, says Automotive News. 40% savings will provide joint procurement, the rest – co-marketing, IT, administration and logistics. Synergy will have a positive net cash flow in the first year, approximately 80% of synergies will be achieved by the fourth year, according to the company. Total one-time cost to achieve synergies is assessed at 2.8 billion euros.
Fiat Chrysler and Peugeot announced the parameters of a future merger of the co-Owners equally divide the shares of the merged company Car
“the Problem our industry is really very serious, said Tavares reporters on Wednesday. – Agreement on climate change, intelligent transport withrodstva, integration into information networks – all these issues require significant resources, strengths, skills and experience.” He sees the Association “great opportunity to take a stronger position in the automotive industry”.
“the two companies have been through tough times and become flexible, intelligent, formidable competitors – are reported words of manly. – A common feature of our employees to consider problems as opportunities for rallying and finding ways to do better what they do”.
FCA produces cars under the brand Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Maserati and Ram, it employs 200,000 people worldwide. The PSA includes five brands: Peugeot, Citroën, DS, Opel and Vauxhall, she 210 000 employees. The company sold a total of 8.7 million vehicles last year, but have a production capacity of 14 million vehicles, according to LMC Automotive. Therefore, the governments of France, Italy and trade unions are wary of the deal, which faces a potential loss of jobs. The transaction may be subject to scrutiny by regulatory authorities.
whether Mike Manley to repeat the success of Jeep in the entire Fiat Chrysler CEO of Jeep Mike Manley led the FCA after the sudden death of Sergio Marchionne Car
the Transaction will most likely change the global automotive industry: PSA will receive a welcome presence in North America, and FCA will be able to catch up with rivals in technology development of cars with low emissions, in which it now lags behind. However, the combined company will continue to strongly depend on the saturated European car market and are poorly represented in China, the largest car market in the world, writes Automotive News.
the Transaction does not eliminate all the disadvantages of the two automakers. The combined business still lacks “full-timegood premium brands” as well as “a good position in China,” said on Tuesday, analyst at B. Metzler Seel Sohn & Co Juergen Pieper.
Spring Fiat Chrysler negotiated a merger with the French Renault, but an agreement was never reached. In early June the Italian-American automaker withdrew its offer, citing a negative political environment in France.