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FCA, Groupe PSA Amend Certain Terms Of Deal To Create Stellantis

Automakers Fiat Chrysler Automobiles NV (FCAU) and Peugeot S.A. or Groupe PSA (PEUGF.PK), who have agreed on a 50/50 merger of their businesses to create Stellantis, announced Tuesday that they have agreed to amend certain terms of their binding deal.

The agreed amendments would address the liquidity impact on the automotive industry of the COVID-19 pandemic while preserving the economic value and fundamental balance of the original Combination Agreement.

Specifically, the special dividend to be distributed by FCA to its shareholders before closing is now set at 2.9 billion euros, compared to previously announced 5.5 billion euros. Further, Groupe PSA's 46% stake in Faurecia will be distributed to all Stellantis shareholders promptly after closing following approval by the Stellantis Board and shareholders.

Both companies' Boards of directors have unanimously approved the amendments.

The existing commitments to support the deal from EXOR, the Peugeot family Group, Bpifrance and Dongfeng Motor Group remain in effect.

As a result of these amendments, FCA's and Groupe PSA's respective shareholders will receive equal 23% shareholdings in Faurecia, while their 50/50 ownership of Stellantis will remain unchanged. Stellantis will now have 2.6 billion euros more cash on its balance sheet.

The companies also agreed that both Boards will 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 be paid following the closing to all Stellantis shareholders.

These decisions will be taken in light of the performance and outlook of both companies, market conditions and performance in the intervening period.

The estimated annual run-rate synergies from the creation of Stellantis have been significantly increased to in excess of 5 billion euros from the 3.7 billion euros originally estimated. The total estimated one-time implementation cost of achieving these synergies has also increased to up to 4 billion euros from 2.8 billion euros.

In all other respects, the economic terms of the deal remain unchanged and the completion of the proposed combination would take place by the end of the first quarter of 2021, subject to the previously agreed conditions.

The newly formed Stellantis is expected to be the world's 4th largest global automotive OEM by volume.

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