The merger between Fiat Chrysler Cars and PSA Group to create the world’s fourth-largest automaker by quantity has taken greater than two years to barter, in keeping with paperwork filed with regulatory authorities this month.
The deal was mentioned over a sequence of worldwide conferences, in Geneva, Paris, Frankfurt, Detroit, Turin and elsewhere.
Main gamers included:
- PSA CEO Carlos Tavares and FCA CEO Mike Manley;
- John Elkann and Robert Peugeot, heirs to the Agnelli and Peugeot industrial dynasties; and
- Key top-level managers, in addition to attorneys, bankers and consultants.
Tavares and Manley stored the deal alive via a shock overture for a merger from FCA to Renault, a seemingly intractable dispute over pre-merger distributions, and the COVID-19 pandemic, which led to a revision of the phrases.
As of late November, all appears set for a closing by the top of the primary quarter of 2021, with solely antitrust approvals in a number of jurisdictions pending — however there was no indication these objects will delay the closing. Shareholders of each corporations are set to satisfy individually Jan. 4 to vote on the merger.
The prospectus particulars the timeline of the merger over greater than six pages. Listed below are among the key moments.
Third quarter of 2018: The automakers met to debate “potential restricted cooperation initiatives” in areas comparable to automobiles and powertrains. Manley had simply taken over as FCA CEO from a gravely ailing Sergio Marchionne. A merger or different mixture was not on the desk.
March 4, 2019: Tavares floated the thought of a mix throughout a gathering with Manley on the Geneva auto present. The CEOs mentioned potential synergies. On April 1 a confidentiality settlement was signed.
April 2019: High FCA and PSA managers met in Paris on the regulation agency Bredin Prat to formally discover synergies, together with combining platforms and powertrains. Potential regulatory points have been additionally mentioned.
Could 27, 2019: FCA supplied Renault a non-binding 50-50 merger. Discussions with PSA “ceased.”
June 6, 2019: FCA stated it was withdrawing the Renault supply following a contentious assembly of Renault’s board of administrators. That very same day, Tavares contacted Manley to restart talks with PSA.
June and July 2019: In a sequence of conferences, Robert Peugeot outlined the phrases of a doable acquisition by PSA of FCA to John Elkann, the scion of the Agnelli household and head of Exor, the controlling shareholder in FCA. Elkann objected, saying FCA shareholders could be “considerably diluted.”
July 22, 2019: PSA’s monetary advisers, MMA, supplied a brand new proposal to FCA: A “merger of equals,” together with pre-merger distributions to shareholders to equalize the market worth of the 2 corporations. FCA, suggested by Goldman Sachs, was lukewarm to the proposal and sought higher phrases, significantly on a pre-merger distribution to FCA shareholders of as much as 7 billion euros. That concern halted talks in August.
Sept. 11, 2019: Tavares and Manley met on the Frankfurt auto present, the place Tavares invited Manley to check PSA’s upcoming hybrid and electrical automobiles.
Oct. 11, 2019: Manley and Tavares handed off negotiations to Goldman Sachs and MMA, who met later within the month to debate rising payouts and the longer term roles of Tavares, who would turn out to be CEO of the brand new firm, and Elkann, who could be chairman.
Oct. 27, 2019: Tavares and Elkann met in Versailles, France, to agree on the principle phrases of the merger: FCA shareholders would obtain a 5.5. billion euro payout in addition to FCA’s 100% stake within the robotic maker Comau; PSA would distribute its controlling stake in provider Faurecia to shareholders.
Oct. 30, 2019: Days after information shops reported on a pending merger, each boards accepted the phrases in precept.
Dec. 17, 2019: A memorandum of understanding was signed and publicly introduced the subsequent day.
Could 23, 2020: Tavares and Elkann mentioned the opportunity of revising merger phrases due to the impression of the COVID-19 pandemic, which had led to momentary manufacturing unit and showroom closures, probably wiping out billions in worth at each automakers.
Aug. 14, 2020: After potential revisions have been mentioned over the summer time, Tavares and Elkann agreed to amended phrases, together with decreasing the FCA shareholders’ payout by 2.6 billion euros to 2.9 billion euros. The brand new phrases have been accepted by each corporations’ boards a month later.