Fiat Chrysler, PSA Merger To Include Investor Loyalty Scheme

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Fiat Chrysler’s merger with Peugeot maker PSA will include a loyalty scheme to reward long-term investors and help prevent future takeover attempts, the prospectus for the planned tie-up shows. Italian-American carmaker Fiat Chrysler (FCA) and France’s PSA agreed to combine in a $38 billion all-share deal in December, uniting brands such as Fiat, Jeep, Dodge, Ram and Maserati with the likes of Peugeot, Opel, Citroen and DS.
Holders of shares in Stellantis – as the merged group will be known – for an uninterrupted period of at least three years may receive a special voting share in addition to each common share, the companies said in the prospectus.
Such a move could make management changes and takeover attempts of Stellantis more difficult, they added. The tax consequences of the loyalty scheme are uncertain, the companies said.
Stellantis will have a Dutch-domiciled parent company and its shares will be listed in Paris, Milan and New York.
Loyalty schemes are common for companies in the Netherlands and have already been used by Exor, the holding company of Italy’s Agnelli family and FCA’s controlling shareholder, not least during the spin-off of Ferrari, boosting Exor’s grip on the luxury sports car maker.
PSA CEO Carlos Tavares will run Stellantis and will receive a 1.7 million euro ($2.02 million) bonus upon completion of the merger.
FCA CEO Mike Manley will receive “a recognition award with a value equivalent to approximately five times his annual base salary” and a cash retention after the merger if certain conditions are met.
The two companies said they have agreed to review the potential distribution of 1 billion euros to shareholders, either through a dividend evenly before the merger, or to be distributed afterwards by Stellantis.
PSA and FCA have filed the merger plan with antitrust authorities in 21 countries and the European Union. To date, they have obtained approval from 15 countries and a preliminary okay from Brazil which becomes final next week. The EU is also expected to authorise the merger, sources have said.
Questions & Answers
Q.What is the purpose of the investor loyalty scheme mentioned in the merger prospectus?
What is the purpose of the investor loyalty scheme mentioned in the merger prospectus?
The loyalty scheme is designed to reward long-term investors and help prevent future takeover attempts of Stellantis. Holders of shares for at least three years may receive a special voting share in addition to each common share.
Q.What are the plans for executive leadership and compensation once Stellantis is formed?
What are the plans for executive leadership and compensation once Stellantis is formed?
PSA CEO Carlos Tavares will lead Stellantis and receive a 1.7 million euro bonus. FCA CEO Mike Manley will receive a recognition award equivalent to approximately five times his annual base salary and a cash retention payment.
Q.Have the merger plans received regulatory approval from authorities yet?
Have the merger plans received regulatory approval from authorities yet?
The companies have filed the plan with antitrust authorities in 21 countries and the EU. They have obtained approval from 15 countries and a preliminary okay from Brazil, which finalises next week.
Q.What have the companies agreed regarding a potential distribution to shareholders?
What have the companies agreed regarding a potential distribution to shareholders?
The two companies have agreed to review the potential distribution of 1 billion euros to shareholders. This could be a dividend evenly before the merger, or distributed afterwards by Stellantis.
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