The PSA Group has begun buying back shares from Chinese partner Dongfeng, ahead of its merger with Fiat Chrysler. Dongfeng Motor had taken a major stake in PSA back in 2014.
PSA stated that it bought back approximately 10 million shares for 163.85 million euros ($191.9 million), which is approximately 1.1% of the French carmaker’s capital, reports Autonews Europe.
The PSA-FCA merger is expected to conclude in Q1 of 2021, with the new company taking on the name ‘Stellantis’.
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Meanwhile, PSA has also announced an amendment to its merger agreement with FCA, which initially called on the French carmaker to buy back a total of 30.7 million shares from Dongfeng before the end of this year.
Now however, the remaining 20.7 million shares will be sold to “PSA or one of several third parties,” and if the transactions don’t close before December 31, then the shares “will have to be sold by Dongfeng to one or several third parties, in one or several transactions by the end of 2022.”
Back in December when PSA first signed its Combination Agreement, Bpifrance and Dongfeng each held 12.23 percent stakes – taken in 2014 when PSA was on the bring of bankruptcy, with the Peugeot family also keeping a 12.23 percent stake. The latter also has an option to increase its stake by 2.5 percentage points by buying shares from either Bpifrance or Dongfeng.
Dongfeng agreed last year to sell down its stake in PSA in order to hold 4.5% of Stellantis, rather than 6.2%. The Chinese company’s potential stake in Stellantis has even drawn the attention of the Trump administration, which intends to review the merger.
