PSA has denied speculation that its planned merger with Fiat Chrysler Automobiles is under threat due to the economic fallout from the coronavirus outbreak.
Paris-based Agence France-Presse recently claimed that the financial terms of the merger had been called into question and the specifics of the deal might need to be reviewed. In a statement to Auto News, however, PSA said it remains committed to the merger despite the coronavirus sharply reducing the market capitalization of both companies.
PSA and FCA signed a memorandum of understanding in December 2019 for a merger of equals with the intention of closing the deal in 12 to 18 months. Teams in France and Italy are believed to be working on operational details and submitting documents to relevant antitrust authorities.
Read More: PSA-FCA CEO Carlos Tavares Suggests No Brands Will Be Cut In Mega Merger
As part of the merger, FCA shareholders will receive a special dividend of $6.1 billion. In addition, PSA shareholders are set to receive the automaker’s 46 per cent share of French supplier Faurecia that’s due to be spun off as part of the deal.
While speaking shortly after the merger was announced, Carlos Tavares – who will become the combined company’s chief executive – said no brands will be cut, asserting the company’s brand portfolio is their greatest asset. It has also been claimed that PSA may abandon its plans to return to the U.S. market and instead sell some of its models under the Chrysler brand but this remains speculation and is unconfirmed.
