PSA Group Seen As The Buyer In Merger Of Equals With Fiat Chrysler

It’s been a day since Fiat Chrysler Automobiles and PSA Group announced their 50-50 merger, leaving enough time for markets to react and figure out who the real buyer is.

FCA’s shares jumped in value by 10 percent following the official announcement, while PSA’s shares dropped by about the same amount, which is the typical buyer’s hit according to a Bloomberg report.

The two car makers went out of their way to make this merger as equal as possible, and that included paying dividends, shedding assets and distributing board seats. FCA shareholders will receive a premium of almost 5 billion euros ($5.6 billion), based on share prices before reports of the negotiations and both sides shed assets before combining their remaining equity.

Read: FCA And PSA Agree To Merge, Create The World’s Fourth Largest OEM

After adjusting the differences in market values and the 5.5 billion-euro dividend paid out to FCA’s shareholders, “achieving a 50/50 shareholding suggests PSA is paying a 32% premium to assume control of FCA,” Jefferies analyst Philippe Houchois said. “PSA shareholders are assuming more market risk.”

As of Tuesday, the PSA Group had a market value of 22.6 billion euros. Prior to merging with FCA, the French automaker will give out its 3 billion-euro stake in parts maker Faurecia to its shareholders, leaving around 19.6 billion euros to be contributed to the new company.

FCA’s shareholders will contribute at least 5 billion euros less; The Italian-American car maker had a market value of 20 billion euros as of Tuesday, but before the merge it’ll have to hand out around 5.75 billion euros that includes both the aforementioned dividend and its robotics arm Comau to its shareholders.

Out of the 5.75 billion euros before the deal closes, FCA’s Agnelli family will gain almost $1 billion in value through their holding company Exor, Fiat Chrysler’s biggest shareholder.

FCA’s Chairman and Agnelli family scion John Elkann will still retain a lot of power, as he’ll be chairman of the new merged company and Exor will be its largest shareholder with around a 14 percent stake.