Fiat, PSA stick to €50 billion merger deal after dividend cut report
by SOURAV D | VIEW 3748
The London-based Italian-American carmaker Fiat Chrysler Automobiles and the French automotive industry giant Groupe PSA said on Friday that the companies were sticking to their merger plan signed last year which in effect would create the world’s fourth-largest automotive industry tycoon.
In point of fact, latest statement from FCA and Groupe PSA came forth shortly after a newspaper report was quoted one of its sources as saying that the carmakers had been exploring an option to spin off assets aimed at slashing a slated €5.5 billion dividend to FCA stakeholders, raising questions on whether there would be an amendment on the merger deal in light of the pandemic-led demand crunch.
FCA, PSA rule out possibilities of dividend cut
Meanwhile, dismissing the report on potential dividend cut to FCA shareholders published on Friday in an Italian business daily II Sole 24 Ore, a spokesman for the French carmaker said, “We (Groupe PSA) remained lucid in the face of the regular speculations to which this merger project is subject,” adding that the carmaker was working out an implementation of the binding agreement signed off on December 2019, while a spokesman for Fiat Chrysler had also rubbed out the feasibility of the report on possible alteration in dividend payoffs saying “The structure and terms of the merger are agreed and remain unchanged”.
In point of fact, followed by an approval from the EU Competition Commission, Groupe PSA and FCA had signed off the binding accord on last December, while the companies were planning to finalize their €50 billion merger by the first quarter of 2021.
Nonetheless, the Italian newspaper II Sole 24 Ore said on its Friday’s report that the Italian-American carmaker would likely to conserve cash by handing over assets instead of the promised €5.5 billion in dividend payoffs to see through the pandemic-driven economic slump, however, the Italian newspaper had also added that the talks were still in an early stage.