Daily Management Review

PSA Group minority shareholder calls for review of merger with Fiat Chrysler


The French investment company Phitrust, a minority shareholder in the PSA Group (which produces Peugeot and Citroen cars, as well as DS, Opel and Vauxhall), has opposed the merger of PSA with Fiat Chrysler Automobiles NV (FCA) on terms agreed last year.

In a press release issued on the eve of the PSA annual meeting of shareholders on June 25, Phitrust noted that already at the time of the transaction in December 2019, the position of the two companies "did not justify the merger on a 50/50 basis."

“Since the announcement of the transaction in the last quarter of 2019 the global economy entered a recession, the PSA group has demonstrated its stability due to the favorable financial situation and proper cost management. The situation was different for the FCA group, whose financial situation is less stable,” the statement reads. 

In addition, Phitrust drew attention to the environmental, social and managerial implications of the merger, and also expressed doubts about the strategic objectives of the transaction.

“Given the technological development in the automotive industry, as a result of which innovative technologies are no longer owned by car manufacturers (for example, Google’s autonomous driving technology), is it really the right decision to scale up at the expense of another manufacturer?” – the company asks.

Phitrust points out that the upcoming shareholders meeting may allow PSA minority shareholders to oppose a decision by major shareholders to back the deal.

source: marketscreener.com