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The
two companies, which are set to merge into Stellantis, the
world's fourth-largest carmaker, said in a joint statement late
on Monday that FCA <FCHA.MI> would cut to 2.9 billion euros
($3.4 billion) the cash portion of a 5.5 billion euro special
dividend its shareholders will receive under the terms of the
accord they signed last year.
France's PSA, whose brand portfolio also includes Citroen and
Opel, will in turn postpone the planned spinoff of its 46% stake
in parts maker Faurecia <EPED.PA> until after the merger's
closing and extend it to all shareholders of the new group.
Faurecia's market capitalisation is around 5.9 billion euros.
"Amendments preserve the balance of original combination
agreement," the two groups said, adding that ownership of
Stellantis would still be split 50/50 between current PSA and
FCA shareholders.
A source said on Monday that the aim of those changes was to
reinforce the balance sheet structure of both companies after
the COVID-19 crisis and ensure that the merger plan is concluded
as soon as possible.
Analysts had argued that such a large cash payout to FCA
shareholders, led by controlling investor EXOR <EXOR.MI>, the
holding company of Italy's Agnelli family, could weaken the new
carmaker's finances, as the auto industry is paying a high price
for the coronavirus outbreak.
Confirming last week that the deal was on track, FCA Chief
Executive Mike Manley said both he and PSA CEO Carlos Tavares
were aware of the need for the two firms to get to the merger
with the strongest balance sheets possible as well as for
shareholders to get what they expected.
FCA and PSA said annual estimated synergies from their merger
were now seen at more than 5 billion euros, compared with an
initial estimate of over 3.7 billion.
The two carmakers confirmed that they expect to complete the
tie-up process by the end of the first quarter of 2021.
Both earlier this year scrapped dividend payments on 2019
results, each worth 1.1 billion euros.
(Reporting by Gilles Guillaume in Paris and Giulio Piovaccari in
Milan; editing by Peter Cooney, Keith Weir and Jason Neely)
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