Geared up

15 September 2020 By Lisa Jucca Follow @LJucca

The Jeep maker’s investors will get about half a jumbo dividend expected via a tie-up with the French group, but more savings and part of Faurecia. The new entity’s balance sheet will now be stronger. And lingering uncertainty about the deal happening should evaporate.

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Fiat Chrysler Automobiles and Peugeot maker PSA, which are set to merge into Stellantis, said on Sept. 14 that FCA would cut to 2.9 billion euros the cash portion of a 5.5 billion euro special dividend its shareholders are set to receive under the terms of an accord signed last year.

PSA will also postpone until after the merger's closing a planned spinoff of its 46% stake in parts maker Faurecia, worth about 5.4 billion euros in market capitalisation, and distribute the stake to all shareholders of the new group.

The two carmakers hiked annual estimated synergies from their merger to over 5 billion euros from an initial estimate of 3.7 billion euros.

The boards of both groups will also consider a potential distribution of 500 million euros to the shareholders of each company before closing or, alternatively, a distribution of 1 billion euros to Stellantis shareholders post-merger.

As of 0740 GMT on Sept. 15, Peugeot shares were trading at 16 euros, down 1.3%. FCA shares were trading at 10.5 euros, up 5.6%.

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