Carlos Tavares, Chairman of the Board of PSA Group, commented on the change of agreement: “With this new milestone, we are moving together towards our goal in the best possible condition and with even greater prospects for Stellantis. I would like to take this opportunity to warmly thank the teams that have established mutual trust, including during the captivity of COVID-19. The human factor is at the heart of the dynamics of such a project, with the support of our shareholders, who have once again demonstrated their commitment to creating stellantis. “This was a clear cash and equity agreement to reach a 50-50 merger agreement between FCA shareholders and PSA shareholders,” Elkann said. The boards of directors of the two companies have agreed to amend their combination agreement reached last December to preserve the 50-50 balance sheet and the economic value of the merger company that will be known as Stellantis, FCA and PSA said in a joint statement on Monday. The agreement is expected to be concluded in the first quarter of 2021. But they also have the most favourable scenario, in which this loss would be mitigated by the planned distribution of 500 million euros in cash, which brings them a total of 1.85 billion euros, 31% less than in the original combination contract. FCA shareholders are still at risk of cancelling the payment. Carlos Tavares, CEO of PSA (left), and Mike Manley, CEO of the FCA, in December 2019, when the two automakers announced a merger.
The two producers recently issued a joint statement that gave more details about the agreement. This is a beneficial step for both parties – PSA will have access to U.S. markets and FCA may be able to use PSA`s new (and electrified) vehicle platforms. Other possibilities, such as autonomous and connected vehicle projects, could also be in the works. The COVID 19 pandemic may have reinforced the industrial logic of the merger between PSA Group and Fiat Chrysler Automobiles, but it has also made the initial financial conditions of the agreement unsustainable. FCA and PSA have reached a binding agreement for the creation of the world`s fourth-largest automaker, which is expected to close FCA boss John Elkann in the first quarter of next year. But there are other changes in the revised agreement that will allow FCA shareholders to recover a significant share – about 1.875 billion euros – of the damage of 2.6 billion euros: the agreement provides that the two companies enter into a fair partnership and make the combined company the fourth largest car manufacturer in the world. The initial combination agreement, reached in December 2019, invited FCA shareholders to receive a dividend of 5.5 billion euros ($6.5 billion) in cash before the merger concluded; While PSA was due to distribute its 46 per cent share of parts supplier Faurecia to its shareholders, it had a market capitalisation of 5.9 billion euros on Monday.