FCA: has now formalized merger of equals with Peugeot
(CercleFinance.com) - Fiat Chrysler Automobiles and Peugeot have signed a binding agreement for a merger of equals, in a deal that will enable the two carmakers to meet the challenging global CO2 regulatory requirements.
In practical terms, PSA shareholders will receive 1.742 shares of the new combined company for each of their shares, while FCA shareholders will obtain one share of the new combined company for each share they own.
The new combined company will have annual unit sales of 8.7 million vehicles, with revenues of nearly 170 billion euros, making it the world's third largest carmaker.
More importantly the deal will generate a total of 3.7 billion euros in annual run-rate synergies, with purchasing alone representing 40% of this amount.
The new group's Dutch-domiciled parent company will be listed on Euronext (Paris), the Borsa Italiana (Milan) and the New York Stock Exchange, FCA and Peugeot said.
Before closing, FCA will pay its shareholders a special dividend of 5.5 billion euros, while PSA will pay its shareholders its 46% stake in the French auto parts maker Faurecia.
The market's initial reaction was positive, with the FCA stock up 0.2% in Milan while Peugeot rose by 1.5% in Paris.
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