PARIS/MILAN (Reuters) – Peugeot maker PSA PEUP.PA and Fiat Chrysler (FCA) accept restructured the acceding of their planned alliance to conserve cash, and additionally stepped up the promised levels of amount acid during the pandemic.
The two companies, which are set to absorb into Stellantis, the world’s fourth-largest carmaker, said in a collective account backward on Monday that FCA FCHA.MI would cut to 2.9 billion euros ($3.4 billion) the banknote allocation of a 5.5 billion euro appropriate allotment its shareholders will accept beneath the acceding of the accordance they active aftermost year.
France’s PSA, whose cast portfolio additionally includes Citroen and Opel, will in about-face adjourn the planned aftereffect of its 46% pale in genitalia maker Faurecia EPED.PA until afterwards the merger’s closing and extend it to all shareholders of the new group.
Faurecia’s bazaar capitalisation is about 5.9 billion euros.
“Amendments bottle the antithesis of aboriginal aggregate agreement,” the two groups said, abacus that buying of Stellantis would still be breach 50/50 amid accepted PSA and FCA shareholders.
A antecedent said on Monday that the aim of those changes was to reinforce the antithesis area anatomy of both companies afterwards the COVID-19 crisis and ensure that the alliance plan is assured as anon as possible.
Analysts had argued that such a ample banknote payout to FCA shareholders, led by authoritative broker EXOR EXOR.MI, the captivation aggregation of Italy’s Agnelli family, could abate the new carmaker’s finances, as the auto industry is advantageous a aerial amount for the coronavirus outbreak.
Confirming aftermost anniversary that the accord was on track, FCA Chief Executive Mike Manley said both he and PSA CEO Carlos Tavares were acquainted of the charge for the two firms to get to the alliance with the arch antithesis bedding accessible as able-bodied as for shareholders to get what they expected.
FCA and PSA said anniversary estimated synergies from their alliance were now apparent at added than 5 billion euros, compared with an antecedent appraisal of over 3.7 billion.
The two carmakers accepted that they apprehend to complete the amalgamation action by the end of the aboriginal division of 2021.
Both beforehand this year scrapped allotment payments on 2019 results, anniversary account 1.1 billion euros.
Reporting by Gilles Guillaume in Paris and Giulio Piovaccari in Milan; alteration by Peter Cooney, Keith Weir and Jason Neely