Fiat Chrysler and PSA agreed to combine in a $38-billion all-share deal in December.STEPHANE MAHE/Reuters
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 car maker 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 spinoff of Ferrari, boosting Exor’s grip on the luxury sports car maker.
PSA CEO Carlos Tavares will run Stellantis and will receive a $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 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 authorize the merger, sources have said.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.