The Fca-Peugeot merger takes off. Tavares ad: it will challenge the Germans

In a joint statement, Fiat-Chrysler and Peugeot-Citroen posted their marriage announcements yesterday morning: an equal merger, which will take place "without closing industrial sites" and with the blessing of the respective states. The wedding should be held soon to define a "binding memorandum of understanding", but the boards of directors unanimously approved the bases.

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With the new group, which will be headquartered in Amsterdam, and will be listed in New York, Milan and Paris, a European giant is born that will challenge the German dominance of the car and will have the same market share as Volkswagen in Europe: 24% . Eleven members of the new board, five appointed by FCA, five by Psa and Carlos Tavares, the current number one of Peugeot, who will be the general manager. President John Elkann instead. With 8.7 million cars sold and a capitalization of 45 billion euros, the new group will be the third world championship (the fourth if Renault and Nissan are added but they are only allies) and will be held fifty-fifty by the shareholders of the two spouses .

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ADJUSTMENT
To achieve this perfect parity, various financial operations will be necessary: ​​FCA should distribute an exceptional dividend of 5.5 billion euros, while Psa should sell its shareholders 46% of Fereucia, a components company.

The adjustment period has already begun yesterday on the Stock Exchange, with the FCA stock up by 8.2% (after a similar rise on the previous day) and by Psa, which lost 13%. "Peugeot's capitalization on the Stock Exchange is higher than that of Fiat-Chrysler, with a 50/50 merger technically it is Peugeot that purchases Fiat. It is normal for the market to take this situation into account, "commented Daniel Larroutrou of Dom Finance. Which recalled how Fca brings a turnover of 110 billion against one of Psa 80 billion. Moreover, in the quarterly report presented yesterday, Fca recorded brilliant margins, over 10% for the most important area: America. For the first years of the company's life, Exor, the financial company of Agnelli-Elkann, will be the first shareholder with 14.2% of the group.

The directions of the two groups were satisfied, they preferred to underline the industrial affinities and the perfect balance between the two parts. «This convergence opens a bright future for the company resulting from the merger. We will build a large group together, "said Tavares. "The proposed merger goes far beyond the numbers and the strategies," echoed Mike Manley, CEO of Fca, in a letter to employees. Benevolent witnesses of the operation, the respective governments. In particular, the French State (13% shareholder of Psa) took a very different position from the one that had sent Fiat's marriage to Renault up. At that time (it was June) the state had always said that the absolute priority was the alliance with Nissan.

On the other hand, marriage now allows both manufacturers to reach the famous critical mass that is indispensable for realizing the necessary investments for new technological and environmental challenges. "Thanks to this operation, France will have two car manufacturers among the top five in the world," said Economy Minister Bruno Le Maire. "It is a market operation, I cannot judge the agreement but what is pressing for the government is that the level of production and employment in Italy is assured", said the premier Giuseppe Conte. Even the majority of union signatures, on one side and the other, look kindly on the merger. In France, in addition to the skepticism of the CGT on employment, it is the choice of the Netherlands as headquarters, which for now arouses the greatest reticence.

Last updated 09:12


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