Fiat Chrysler Automobile's $44bn Merger with PSA Groupe

By Ilya Korzinkin, Mihir Gupta and Hugo Tay (UCL) - Date: 17/11/2019

 

Overview of the Deal

  • Acquirer: Groupe PSA (Peugeot SA, EPA: UG)

  • Target: Fiat Chrysler Automobile (MTA: FCA, NYSE: FCAU)

  • Estimated value: $44bn

  • Announcement date: 31/10/2019

  • Acquirer Advisors: Perella Weinberg, Messier Maris & Associés

  • Target Advisors: Lazard, Goldman Sachs, d'Angelin & Co.


After enhanced discussions, the path opened up for a new group with global scale and resources to be established whereby the ownership will be a 50-50 split between Groupe PSA and FCA. This merger is anticipated to create the 4th largest global OEM (original equipment manufacturer) in terms of annual unit sales which is projected at an approximate of 8.7 million vehicles. 


This merger is targeted at uniting the two groups’ respective brand strengths across Luxury, Premium, Mainstream Passenger Car, SUV and Trucks & Light Commercial using extensive and growing capabilities in the technologies to shape a new era of sustainable mobility. Some of the aspects that the merger aims at specialising in are electrified powertrain manufacturing, autonomous driving and digital connectivity. 


It has also been decided that prior to the completion of the transaction, FCA would distribute to its shareholders a special dividend of $6.13 billion, as well as its shareholding in Comau. In addition, prior to completion, Peugeot would distribute to its shareholders its 46% stake in Faurecia. The NewCo’s shares will be traded in Milan, Paris and New York, with FCA’s John Elkann, who heads Italy’s Agnelli family controlling Fiat-Chrysler, becoming the chairman and Peugeot’s Carlos Tavares becoming the CEO.


“This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity. I’m pleased with the work already done with Mike and will be very happy to work with him to build a great company together.”                          

– PSA Groupe CEO Carlos Tavares


Company Details (Fiat Chrysler)

Fiat Chrysler Automobiles (FCA) headquartered Amsterdam, Netherlands is a global automaker that designs, engineers, manufactures and sells vehicles in a portfolio of exciting brands, including Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Ram and Maserati. It also sells parts and services under the Mopar name and operates in the components and production systems sectors under the Comau and Teksid brands. 


- Founded in: 2014

- CEO: Mike Manley

- Number of Employees: 198,545


- Market Capitalization: $ 31,840 Million                           - EV:  $30,487 Mil

- TTM Revenue:  $121,500 Mil                                                   - TTM EBITDA:  $10,790 Mil

- TTM EV/Revenue: 0.25x                                                          - TTM EV/EBITDA: 2.83x


Company Details (PSA Group)

Groupe PSA headquartered in Rueil-Malmaison designs unique automotive experiences and delivers mobility solutions to meet all customer expectations. The Group has five car brands, Peugeot, Citroën, DS, Opel and Vauxhall and provides a wide array of mobility and smart services under the Free2Move brand.


- Founded in: 1976