The article is from the public number: Car stuff (ID: chedongxi) < / a> , author: Bear, formerly titled: “European and American car companies set up two trillion Group! Ranked No. 4 in the world, four details were announced last night.country.
The fourth largest car company in the world is one step closer to being born.
Last night, Peugeot Citroen Group (PSA) and Fiat Chrysler (FCA ) The two major car companies signed a binding joint agreement and finalized many details, including the headquarters of the new group’s parent company, the listing plan, the shareholding distribution of the original group shareholders, the cooperation between the two parties, etc. information.
▲ PSA Group releases the announcement that the parties agree to merge
The reporter learned from the PSA official website and the FCA official website the information and the senior executives of the two sides of the conference call for investors to learn four new key content:
1. After the merger of PSA and FCA, the new group will be headquartered in the Netherlands, will have branches in Italy, France, and the United States, and will be listed on three stock exchanges in Paris, Milan and New York.
2. The original shareholders’ equity of PSA and FCA will be distributed in the new company under the new rules. The original PSA shareholders’ equity will be converted into the new company’s equity at 1: 1.742, and the original FCA shareholders’ equity will be converted at a 1: 1 ratio. .
3. The two parties will start new cooperation in the fields of automotive electrification, intelligent networking, autonomous driving and travel services. The original partners will continue to provide support.
4. The two companies will convene an extraordinary shareholder meeting next time, soliciting shareholders’ consent for the merger transaction, and also obtaining approval from antitrust agencies. It is expected that it will take 12-15 months to complete the above process.
The merger of the two companies was once dubbed a “weak alliance”, but if you look at the sales of auto companies in 2018, PSA and FCA two carsThe company’s model sales exceeded 8.7 million units, exceeding 8.4 million units of GM. If there is no accident, the merged two auto companies are likely to sit on the throne of the world’s fourth largest car company (The top three are Volkswagen, Toyota, Renault – Nissan-Mitsubishi Alliance) .
▲ Sales rankings of FCA and PSA before and after the merger
It should also be pointed out that the European market owned by PSA and the American market owned by FCA (including the United States, Canada, and countries in South America) It will enable the products of both parties to obtain a wider sales channel, and the synergy effect behind it will likely bring new potential to this group.
01 PSA signs joint agreement with FCA! Finalize four details of the new company
Peking Peugeot Citroen (PSA) and Fiat Chrysler (FCA) respectively announced the announcement of the joint agreement between the two companies, and held a conference call for global investors at 22 o’clock on the day of Beijing time. .
It should be noted that although the two companies reached a consensus on the merger on October 31 this year, they did not sign a binding document at that time and the information released by the new company was not comprehensive. The signing of the joint agreement this time is basically the matter of merging PSA and FCA.
In the joint agreement signed today and the conference call held, PSA and FCA revealed four details about the new group:
1. After the merger of the two companies, the new company’s headquarters will be located in the Netherlands, with branches in Italy, France, and the United States, and will be listed on the stock exchanges in Paris, Milan and New York.
2. After the merger of PSA and FCA into a 50:50 equity group, the shares held by the shareholders of the original PSA group will be converted into shares of the new company at a ratio of 1: 1.742; Some shares will be converted 1: 1.
3. Both parties will carry out in-depth cooperation in the areas of electrification, intelligent network connection, travel and autonomous driving, and the original partners of the two companies will also participate.
4. The two companies will convene an extraordinary shareholder meeting next time, soliciting shareholders’ consent for the merger transaction, and also obtaining approval from antitrust agencies. It is expected that it will take 12-15 months to complete the above process.
With the above four details, let’s give a general overview of the situation after the merger of PSA and FCA:
1. Overview of the new company and the situation of the board of directors
The combined company of PSA and FCA is expected to be established in 2021, with headquarters in the Netherlands, branches in Italy, France, and the United States, and listings in Europe and the United States.
The leadership structure of the new company is as follows: The chairman of the board of directors is John Elkan, the current chairman of FCA, and the CEO is Tang Weishi, the current CEO of PSA. The board has 11 seats, and most of the members are independent directors.
▲ Peugeot Citroen CEO Tang Weishi (left) Fiat Chrysler Chairman John Elkan (right)
Among the 11 seats, PSA Group will nominate 5 seats, including senior nominee directors and vice-chairmen, including the nominee. Among them, 2 seats are PSA Group, 1 seat is BPIfrance of French investment bank, Peugeot family 1 Seats and one memberIndustrial representatives; 2 seats in the FCA Group, 2 seats in the Italian industrial and commercial group EXOR N.V., and an employee representative; CEO Tang Weishi is also a member of the board of directors.
2. Shareholders’ equity holdings
▲ Shareholders’ equity holdings
Existing PSA and FCA shareholders will each own 50% of the new company. At the same time, a single shareholder will not be entitled to more than 30% of the total voting power at the general meeting.
After the merger of PSA and FCA into a 50:50 equity group, the shares held by the shareholders of the original PSA Group will be converted into shares of the new company at a ratio of 1: 1.742; The shares will be converted 1: 1.
Before the completion of the transaction, PSA Group will provide PSA shareholders with 46% of Faurecia shares; FCA shareholders will receive a special dividend of 5.5 billion euros.
After the transaction, Comau, an advanced production equipment company owned by FCA, will immediately spin off (FCA no longer holds the equity of Comau) to protect the interests of shareholders of the new group.
After the transaction, the major shareholders and shareholdings of the new company are Italian industrial and commercial group EXOR NV14%, Peugeot family 6%, and French investment bank Bpifrance 6%. Dongfeng Motor Group reduced its holding of 30.7 million shares of PSA Group in the new company. The group holds 4.5%.
3. Operating conditions of the new company
Based on the situation in 2018, after the merger is completed, the annual sales of the new company’s cars will reach 8.7 million units, ranking fourth in the global automotive industry. In terms of operating income, the annual revenue of the combined new company will reach approximately 170 billion euros (about 1.3 trillion yuan) , ranking third in the global automotive industry.
The new company will have a net cash of 13.8 billion euros (approximately 107.4 billion yuan) and total liquidity will reach 42.2 billion euros (about 328.5 billion yuan) , the consolidated balance sheet and the discount power of assets are considerable, which will bring investors and investment institutions’ ratings confidence.
At the same time, PSA and FCA predict that after the merger of the two major car companies is stable, it will generate 3.7 billion euros per year. (about 28.8 billion yuan) < / span> ‘s annual synergy. In the first year after the merger, the synergy effect will generate cash flow; in the fourth year, the synergy effect will reach 80% of the steady state, which is 2.96 billion euros. (About 22.6 billion yuan) .
In the annual synergy of € 3.7 billion (about 28.8 billion yuan) , Vehicle, powertrain, manufacturing-related product research and development cost savings accounted for 40% of them, spare parts and other items procurement cost savings accounted for 40% of them, marketing, IT, logistics and other fields saved costs accounted for 20% of them .
In terms of platform and powertrain improvement, the new group will optimize the original model platform and powertrain, and the models produced by the two platforms with the best model sales will account for the new group’s 2/3, and reached the industry benchmark level. At the same time, the new group will also improve its manufacturing and research and development processes to increase the versatility of parts and components to reduce costs and increase efficiency.
4. The situation of the new four transformations
For the transformation of the new four modernizations, PSA and FCA have divided the four modernizations into electrification, intelligent networking, mobility and autonomous driving.
In terms of electrification, in 2020, the two companies have not yet completely merged, and they will each launch new energy models.
▲ PSA and FCA’s electrification transformation plan
PSA will have two vehicle platforms suitable for multiple powertrains, and each new model will have a pure electric or hybrid version. PSA’s electric vehicles based on these two platforms have been introduced to the market in 2019. By 2020, the company will have 7 plug-in and 7 pure electric models.
FCA plans to launch one pure electric vehicle, three plug-in hybrid models, and three 12V micro-hybrid models, and it will meet the emission regulations by launching small-displacement fuel vehicles.
The two companies are expected to merge in 2021, at which time each new car of the new group will be offered with an electric version.
In terms of intelligent networking, PSA and FCA each have industry-leading partners.
▲ Partners in the transformation of innovative technologies on both sides
PSA has entered into cooperation with orange, HARMAN, and TOMTOM in the fields of IoT and in-vehicle communications. The areas of cooperation include IoT platforms, in-vehicle interconnection and in-car infotainment systems.
FCA’s partners include Google, HARMAN, transatel in the fields of Internet and in-vehicle communication. Through the global layout of partners, FCA has realized the Internet of Vehicles service in most parts of the world.
In terms of mobility and autonomous driving,PSA has reached cooperation with companies such as autonomous driving startups FREE 2 MOVE, EASY MILE, and traditional Tier1 Apollo.The cooperation with Apollo mainly focuses on the L2 / L3 level of autonomous driving of passenger cars, and the two Cooperation is more about L4 / L5 level autonomous driving for public travel.
FCA has reached cooperation with Waymo, Ampof, and BMW in the field of travel and autonomous driving. Beginning next year, L2-level autonomous driving systems will be deployed on its high-end models. In addition, the company is also collaborating with Waymo on the L5 level unmanned project. Waymo’s early self-driving test vehicles will be converted from FCA’s hybrid version of the Jetta.
02 Uncertainties remain in mergers Persuasion of shareholders and antitrust agencies is most important
Although the merger of the two companies can make it the fourth largest car company in the world, there are still uncertain factors in the merger of the two companies.
During last night’s conference call, the two executives stated that the boards of FCA and PSA have now unanimously approved the establishment of the new company and signed a memorandum of understanding for the new group of 50:50 equity; both parties have also completed the investigation process. ; And obtained union approval.
But there are still tasks to be completed. The two companies will separately hold extraordinary shareholders meetings to seek shareholders’ consent for the merger transaction. At the same time, they need to obtain approval from antitrust agencies.
In May this year, the FCA tried to merge with Renault of France. However, due to the French political environment, the obstruction of antitrust agencies, the opposition of Renault shareholders French government and Nissan, the proposal was finally defeated in June.
This time, the merger of FCA and PSA also faces the scrutiny of antitrust agencies and their respective shareholders, but overall, major shareholders have nodded their approval, and the resistance will be much smaller than the previous merger between FCA and Renault.
The unions in Italy, the United States, and France also nodded in agreement because the two companies promised not to close the plant.
03 Concluding Remarks: Global car companies hold a clear winter trend
The global economic growth has slowed down, the auto market has entered a downward cycle, and the impact of new technologies has become more and more fierce. Under such a complex environment, the trend of car companies holding groups has become more apparent. In early 2019, Volkswagen entered into an alliance with Ford and deepened cooperation in the follow-up.To jointly develop electric vehicles and autonomous driving technologies. The FCA also tried to merge with Renault in May this year, and then switched to PSA after failure.
The merger is currently progressing smoothly. By 2021, if there is no obstruction from external forces, Peugeot Citroen and Fiat Chrysler will officially merge to become the fourth largest car company in the world. (based on 2018 sales) .
After the merger, the synergies generated by the two parties will play a role in the development and production of models, electrification, intelligent networking, mobility and autonomous driving, and save billions of euros in costs . This is a rare opportunity for car companies that are generally reducing costs and increasing efficiency.
But the two auto companies still need to obtain the consent of their respective shareholders’ meetings and antitrust agencies, and it will take a year at the earliest to formally establish a new group.
The article is from the public number: car stuff (ID: chedongxi) , author:. Bear