PSA refutes speculation that the planned merger with Fiat Chrysler Automobiles is at risk due to economic fallout from the coronavirus outbreak.
Recently, the Paris-based agency France-Presse claimed that the financial terms of the merger have been called into question and that the specifics of the deal may need to be revised. In a statement to Auto News, however, PSA says it remains committed to merging despite the coronavirus, sharply reducing the market cap of both companies.
The PSA and FCA signed a memorandum of understanding in December 2019 on a merger of equals with the intention of closing the deal in 12-18 months. It is estimated that the teams of France and Italy are working on operational details and submitting documents to the relevant antitrust authorities.
Read more: PSA-FCA CEO Carlos Tavares suggests no mega merger of brands
As part of the merger, FCA shareholders will receive a special dividend of $ 6.1 billion. PSA shareholders also intend to get a 46 percent stake in the automaker’s French supplier Faurecia, which should be shut down as part of the deal.
Speaking shortly after the announcement of the merger, Carlos Tavares, who will become the CEO of the merged company, said no brands would be cut, and was confident that the company’s portfolio of brands was their greatest value. It has also been claimed that PSA may abandon its plans to return to the US market instead of selling some of its Chrysler-branded models, but that remains unconfirmed.