Stellantis adapts to coronavirus pandemic

The situation posed by COVID-19 forced PSA and Fiat Chrysler to review the terms of their merger agreement.

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El PSA Group y Fiat Chrysler Automobiles (FCA) will review the terms of the agreement announced last December to create a new automotive group under the name of Stellantis, an operation that is expected to close at the end of the first quarter of 2021.

In a joint statement, both firms have justified this decision on the need to adapt to the liquidity impact of the COVID-19 pandemic will have in the auto industry, while preserving the economic value and fundamental balance of the deal.

Specifically, Fiat Chrysler will distribute an extraordinary dividend among its shareholders of 2.900 million euros, compared to the 5.500 contemplated in the original agreement, while PSA's 46% stake in Faurecia will be distributed among all the shareholders of the new group once approved by the Stellantis Board of Directors.

The modifications also include the potential distribution of 500 millones de euros between the shareholders of both groups or of 1.000 million those of the resulting group after the closing of the transaction.

In this way, the rest of the conditions announced in the merger agreement last December will not be modified to create the fourth automobile group by sales volume and the third by revenue, with combined annual registrations of 8,7 million units and a turnover of almost 170.000 million euros a year.

As announced at the time, the operation will generate annual synergies of approximately 3.700 billion euros and the new combined company will achieve an operating result of more than 11.000 millones de euros, with an operating margin that will be in the 6,6%.

Furthermore, the creation of the new group, 50% owned by PSA and FCA, will serve to achieve a greater geographical balance, since 46% of its business volume will come from Europe and 43% from North America.

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Automundo is the blog about news from the automotive industry, motorsport and the culture of the region. Director: Diego Durruty.

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