Fca-Psa, here are truths and lies about what will happen with the merger

"Fca-psa, an au pair marriage, do not close factories ”. Thus, some press agencies still headline and write many newspapers, delving into the merger project between PSA and FCA.

It's really like this? Is it really an au pair marriage? And don't they really shut down factories in Italy? There are those who are not so sure (despite being aware that this outcome is perhaps the best outcome for the two companies, according to the editorialist Stefano Cingolani at Start)

If it is an au pair marriage why will the majority of the post-merger group's board of directors be the prerogative of Psa and the head of the company will be Psa's number one, Carlos Tavares?

PSA BOUGHT FCA AND EXOR RECEIVES A CEDOLONE

"Psa is essentially buying Fca", says a report by Equita Sim, paying a "good prize" (of around 5.5 billion for Fca shareholders, firstly therefore Exor) and securing the "majority" of the board of post-merger company.

NUMBERS AND REPORTS

At the close of Tuesday Fca was worth about 18.5 billion euros while Peugeot was about 22.6 billion. Subtracting from the Italian-American group the 5.5 billion of the extraordinary dividend and the value of Comau's share, estimated by Kepler at 250 million euros, and from the French one the value of the share in Faurecia, equal to about 2.7 billion, there is a "theoretical market capitalization" of "20 billion" for Peugeot and "13.25 billion" for Fca.

WHAT FAIRNESS ANALYSIS SAY

On the basis of these values ​​and "without a premium", the shareholders of Peugeot would have been entitled to 60.15% of the new group and to those of Fca 39.85%, rather than 50% at the head of the negotiation. For Equita analysts, this is a "positive deal" that improves "the risk profile", "allows us to benefit" from "significant industrial synergies" and "obtain a valuation bonus".

THE FRENCH BOARD CONTROL

"Basically – it is written in the report – Psa is buying Fca (checking the board) paying a good prize (over 30%)", a prize that "the market is already partially discounting". The fact that, despite the distance between the initial values ​​of the two groups, we get "a 50/50 shareholding suggests that Psa is paying a 32% premium to take control of Fca", notes Jefferies analyst, Philippe Houchois, quoted by Bloomberg.

THE ANALYSIS OF PROF. BERTA

From the analysts we pass to a historian known for his studies on the Fiat group and beyond. From marriage to Fca "The French take home a significant presence in North America, with the Jeep brand that is going well. Fca takes the electric motor home, but above all the guidance of a great manager like Carlos Tavares. Marriage is almost like equal, but executive leadership is in the hands of the French, "he told theAdnkronos Giuseppe Berta, professor of contemporary history at the Bocconi University of Milan, industrial historian and expert of the Italian-American group: "Fca could no longer be alone, because it is characterized by a profound dysfunctionality: it has an American side that is fine, with brands that sell, and a European side that goes wrong, with the Italian brands suffering, especially Alfa Romeo, protagonist of a dramatic fall ".

CUT RISKS IN ITALY

Will there be no production cuts in Italy? Berta is not so sure, on the contrary: after the merger between Fca and Psa “in Europe there will be overcapacity and overlapping of brands and activities. It is inevitable that there will be cuts to plants and employment in the medium and long term. " "In the PSA shareholding – said Berta – there is the French State and Opel is a piece of the German industrial system. It is a very positive thought that nothing will happen in Italy ”.

THE FUTURE OF COMPONENTS

The Italian components "which already has strong ties with the French and German automotive industry will have to work to further strengthen these ties. Local production systems will have to be given a good move to intensify ties with the final producers outside Italy, "added Berta.

THE TWEET POINTS OF RUGGERI

Even more clear than Berta and sim analysts and business banks is Riccardo Ruggeri, former top manager of Fiat, now an expert in the sector, entrepreneur, essayist, columnist and founder of Saffron News. Here are some of his tweets:

The Peugeot Communique says that "no establishment will be closed". The yellow unions and the press believe us Cite a single number 3.7 billion euros of efficiencies Both Peugeot and FCA are well managed the costs are already at the bone, ergo is a dramatic number Reference to the Cameo on Monday

– Riccardo Ruggeri (@editoreruggeri) November 2, 2019

Mr. CEO: from the review these antics of the Italian press No joint strategic design. Peugeot bought an American company (FCA), this has four establishments in Italy. The only question: Tavares closes them or resizes them? The rest is crap

– Riccardo Ruggeri (@editoreruggeri) November 2, 2019