The information about an extremely significant deal in the automotive world was made public. A car maker of Peugeot, Citroen, DS and Opel PSA Group has agreed with Fiat Chrysler Automobiles NV (FCA) to merge. Due to the deal, the fourth largest concern in the world will appear.
On this occasion, they issued a statement that the merger would be carried out on a 50 to 50 basis.
The boards of directors of both companies approved the deal two months ago.
After the merger, the current shareholders of FCA and PSA will divide the shares of the newly formed company in half. The new company will be managed by Carlos Tavares, the current CEO of PSA Group. John Elkann, Chairman of the Board of Fiat Chrysler, will assume a similar position in the combined company.
The merger is a very reasonable step for both companies. The merger will result in the appearance of a serious market player with a capitalization of about $ 50 billion. The companies will not have to close factories. By the way, the effect of the transaction is now estimated at a very impressive figure of 3.7 billion euros per year.
It is assumed that the merger will be realized in a year.
The shares of both automakers have grown on this positive news: Fiat Chrysler shares have risen 1.8%, PSA shares have increased 4.5%. The growth is likely to go on.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group