Fiat Chrysler, Peugeot maker PSA amend merger terms to conserve cash
PARIS/MILAN (Reuters) - Peugeot maker PSA and Fiat Chrysler (FCA) have restructured the terms of their planned merger to conserve cash, and also stepped up the promised levels of cost cutting during the pandemic. The two companies, which are set to merge into Stellantis, the world's fourth-largest carmaker, said in a joint statement late on Monday that FCA would cut to 2.9 billion euros ($3.4 billion) the cash portion of a 5.5 billion euro special dividend its shareholders will receive under the terms of the accord they signed last year.
PARIS/MILAN (Reuters) - Peugeot maker PSA
The two companies, which are set to merge into Stellantis, the world's fourth-largest carmaker, said in a joint statement late on Monday that FCA
France's PSA, whose brand portfolio also includes Citroen and Opel, will in turn postpone the planned spinoff of its 46% stake in parts maker Faurecia
Faurecia's market capitalisation is around 5.9 billion euros.
"Amendments preserve the balance of original combination agreement," the two groups said, adding that ownership of Stellantis would still be split 50/50 between current PSA and FCA shareholders.
A source said on Monday that the aim of those changes was to reinforce the balance sheet structure of both companies after the COVID-19 crisis and ensure that the merger plan is concluded as soon as possible.
Analysts had argued that such a large cash payout to FCA shareholders, led by controlling investor EXOR
Confirming last week that the deal was on track, FCA Chief Executive Mike Manley said both he and PSA CEO Carlos Tavares were aware of the need for the two firms to get to the merger with the strongest balance sheets possible as well as for shareholders to get what they expected.
FCA and PSA said annual estimated synergies from their merger were now seen at more than 5 billion euros, compared with an initial estimate of over 3.7 billion.
The two carmakers confirmed that they expect to complete the tie-up process by the end of the first quarter of 2021.
Both earlier this year scrapped dividend payments on 2019 results, each worth 1.1 billion euros.
(Reporting by Gilles Guillaume in Paris and Giulio Piovaccari in Milan; editing by Peter Cooney, Keith Weir and Jason Neely)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.