Fca-Peugeot, that's why it's Paris to buy Fiat Chrysler. For Exor maxi-dividend of 5.5 billion

"It is Paris that buys FCA": financial analysts have no doubts, who yesterday immediately made the accounts of the announced merger between Fca and Peugeot that will give life to the fourth world car group. That is why on Thursday the two stocks moved in a different way: FCA jumped 8.2%, while PSA lost 12.8%. Yet the transaction was announced at par, with the same weight, 50% each, for the current shareholders of Fca and Psa in the new post-merger company. The fact is that they are not the starting values. Psa was worth 22.6 billion euros on Tuesday evening, and Fca 18.5 billion.

To reach a joint agreement, Psa (with Mediobanca advisor) has awarded Fca (assisted by Goldman Sachs) a premium of 6.7 billion, according to the calculations of Kepler Chevreux. In addition, its Fca members assign an extraordinary maxi-dividend of 5.5 billion and Comau (the assembly line robotics company), which is split from the group. Only Exor, the holding company of the Agnelli family that has 28.7% of Fiat Chrysler, will receive 1.6 billion euros. It is no coincidence that on Thursday its stock price rose by 5.69%. From the old Fiat, Exor has already gained shares since the previous spin-offs like Cnh, Ferrari, Rcs, Iveco, which have freed billions of value. Psa instead distributes to its members the 46% that owns in the jewel of the Faurecia components, equal to about 2.7 billion euros.

Equita also speaks explicitly of "sale": the French pay a 30% premium for control of the board, 6 out of 11 including the CEO, who will be the current CEO of the French group Carlos Tavares, while president will be the number one Fca, John Elkann. Exor will hold 14.2% of the new company – based in the Netherlands and listed in Paris, Milan and New York – while the three current shareholders of Psa, the Peugeot family, the French State and Dongfeng Chinese will each hold 5.9 %. It will be a question of seeing in the future how the balance between the members will develop. For three years, they will not be able to sell (lock up).

"We have worked hard to ensure a real balance in the governance and management of the group we are planning," said Elkann. One of the first financial advantages will be the lower credit risk. According to Equita, FCA bonds could be promoted to "investment grade". A breath of fresh air for the group, whose quarterly accounts show the difficulties of the market: net loss of 179 million after revenues of 27.3 billion euros and 1.059 million cars delivered, -9%. The CEO Mike Manley has however confirmed the 2019 targets.