Fiat Chrysler et PSA vont officialiser leur fusion ce jeudi
The official engagement will be announced this Thursday. Having
confirmed Wednesday morning to have discussions to "create one of the world's leading automotive groups," PSA and Fiat Chrysler (FCA) met during the day their respective advice - which have endorsed. According to our information, after several discussions each time overcame in recent years, "the two groups have this time found a satisfactory balance," says a source familiar with the case. They should announce their agreement to enter into exclusive negotiations, before a formal signature within a few weeks. The social partners have also been convened for an extraordinary meeting early this morning.
The two groups will merge equals by exchange of shares. Carlos Tavares, current chairman of the PSA board, will become the new group's managing director for a minimum of five years, while John Elkann, leader of the Agnelli family and president of Fiat Chrysler Automobiles (FCA), will retain the Presidency. The Board of Directors will have 11 members, including 6 from PSA (including Carlos Tavares) and 5 from FCA. The head office of the new entity will be established in a neutral country, the Netherlands, while the three operational headquarters will remain based in France, Italy and the United States.
Head office in neutral country
To rebalance the respective valuations of the two groups and achieve a 50/50 merger, they will undertake several operations: PSA will distribute to its shareholders its Faurecia shares (46% of the capital of the equipment manufacturer, valued at approximately 3 billion euros), while FCA will distribute to its shareholders an exceptional cash dividend of 5.5 billion euros.
So far, the negotiations had stumbled on questions of balance of capital and governance, neither of the two families, Peugeot or Agnelli, being really ready to let the other one become predominant in the new set. But the Agnelli hold much more in "their" constructor than the Peugeot: 29% approximately, against 12.2% of the capital (and 19.3% of the voting rights) for the French.
According to our information, the Peugeot family has finally let go of the ball on this point -conforted by a favorable governance: the participation of the Agnelli family will remain higher than that of the Peugeot (between 14.5%, against a little more than 6%). Double voting rights will be reset.
The state and Chinese Dongfeng will also have their say: both are also shareholders of PSA, with a participation equivalent to that of the family. In particular, Bercy argued that "the State will be particularly vigilant about the preservation of the industrial footprint, the governance of the new entity, the preservation of BPI's heritage interests and the confirmation of the new group's commitment to the creation of 'a European industrial battery industry'.
Number 4 worldwide
The operation would give birth to a new automotive giant, which with 8.7 million vehicles sold between them and 184 billion euros in turnover, become the world number 4 in the sector, behind Volkswagen, Toyota, and the Renault-Nissan-Mitsubishi Alliance. Thanks to its 14 brands, including 5 from PSA (Peugeot, Citroen, DS, Opel and Vauxhall) and 9 from FCA (Fiat, Chrysler, Alfa Romeo, Jeep, Abarth, Lancia, Maserati, Dodge), it would be present on all the automotive range, from basic to luxury. The two groups are also very complementary in geographical terms.
"This is a very nice operation, very logical for both groups ... much more than was a marriage with Renault," says a senior executive of the sector. After several attempts to merge with PSA, John Elkann finally turned to Renault last spring ... but the "deal" had turned in extremis without the agreement of Nissan partner, much to the chagrin of the president of Renault, Jean- Dominique Senard. While the priority within the Diamond is now to revive the Alliance, the Agnelli have therefore found it better to find another partner.
There is urgency: FCA, which has not invested enough in the renewal of its range or in its electrification, absolutely needs a partner to ensure its future. "There is no other possible than Renault or PSA! ", Analyzes a good connoisseur of the sector. For PSA, which is in great shape, this is the perfect opportunity to get out of its status as a regional manufacturer, and to amortize its investment in technology. The announcement has in any case boosted the two groups on the stock market: + 4.5% for PSA, and + 9.5% for FCA in the day of Wednesday.