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17 December 2019The first yes to the merger between Fca and Psa has arrived. The supervisory board of Psa has approved the binding memorandum of understanding (MoU) to merge with Fiat Chrysler Automobiles.

The decisive factor was the yes of the Peugeot family, the reference shareholder of the French group. The adhesion took place unanimously as reported by France Presse, adding that the two branches of the dynasty (Roberto and Thierry Peugeot) will have a representation in the council. The family owns 14% of Psa (and 25% of the voting rights) as well as the French State that has confirmed the go-ahead for the operation. For Paris it is a question, in particular, of "building a new champion of world stature to respond to the challenges of sustainable mobility".

The Chinese of Dongfeng, who have 12.2% and 19% of the voting rights, have made it known that they intend to lighten the position. They do this both for financial reasons (their investment of 800 million has tripled) and for political reasons: the Trump administration could raise some problems considering that the most important gift of the marriage is represented by Jeep and Chrysler.

The French government also reiterated the green light to "build a new champion of world stature to meet the challenges of sustainable mobility". Immediately after the French yes the FCA board of directors met to follow up the merger. The official announcement should arrive tomorrow morning. Unions have been summoned for Friday. Then overcome the last obstacles that had invested above all Fca. That is to say the lawsuit brought by General Motors for corruption in relations with the American trade union United Auto Workers and the Inland Revenue which has challenged Chrysler's assessment at the time of the merger with Fiat that gave way to Fca.

In broad terms the terms of the agreement have already been anticipated. A holding company will be set up in Amsterdam to take advantage of the Dutch legislation. FCA will separate from Comau (welding robot) with the distribution of a 5.5 billion coupon. Psa will do the same with Faurecia (components) against which a 2.7 billion coupon will then be distributed to the shareholders of the French company. The new parent company based in the Netherlands will be listed in Paris, Milan and New York.

The fourth car manufacturer in the world will be born with 8.7 million cars registered each year. Synergies are planned for 3.7 billion as well as an investment capacity able to withstand the challenge of electrification and autonomous driving. Governance includes five extraction advisors Psa and five Fca. The eleventh will be the current CEO of Psa, Carlo Tavares, who will become CEO of the new group. The presidency will be up to John Elkann.

According to advances, the Agnelli heirs will have about 14% of the new group and will be by far the first shareholders as the Peugeot family and the French state will drop to around 6% each. The partners have committed themselves not to sell or buy shares for five years. Only the Peugeot family could have a derogation going up by 2.5% with shares purchased by Dongfeng or the French government.