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FCA and PSA revise merger due to COVID-19

Fiat Chrysler and PSA announced plans to amend the merger that will launch Stellantis in 2021.  FCA announced in a press release that the amendments were made to address the liquidity impact on the automotive industry due to COVID-19. The companies plan to preserve the economic value with a 50-50 balance of the combined entity known as Stellantis.

Fiat Chrysler will distribute a $3.4 billion dividend to shareholders before the merger instead of the previous agreement of $6.5 billion. PSA plans to delay the distribution of its 46% stake in auto supplier Faurecia until the deal closes. 

Based on current market performance, the boards of each company are considering a distribution of $593 million to each company’s stockholder prior to the merger or a $1.2 billion allocation after the deal is complete. 

Related: FCA’s dedication to building a more diverse and inclusive dealer body

“With this new decisive milestone, we are moving all together towards our goal in the best possible condition with even greater prospects for Stellantis,” said Carlos Tavares, Chairman of the Managing Board of Groupe PSA, in the press release. “I would like to take this opportunity to warmly thank the teams who have built reciprocal relations of trust, including during the COVID-19 confinement. The human factor is at the heart of the dynamic of such a project, together with the support of our shareholders who have once again demonstrated their commitment to the creation of Stellantis.” See the source image

Both companies confirmed that all aspects of the original Combination Agreement, signed in December of 2019, remain intact. The merger is scheduled to take place at the end of first quarter in 2021.

“I cannot commend highly enough the commitment of the teams working towards the launch of Stellantis and of all our people in overcoming the extraordinary challenges COVID-19 has presented,” said Mike Manley, Chief Executive Officer of FCA. “Today’s announcement is a further, strong signal of a common determination to ensure that Stellantis has all the resources it needs to apply its unique assets, its creative energies, and many opportunities to the creation of superior value for all our stakeholders.”

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Josh Isley
Josh Isley
Josh Isley is a staff reporter for CBT News. Josh graduated from Auburn University with a Bachelor of Arts in Communication. He is experienced in reporting trends and news in the automotive industry.

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