Green light to the flash marriage between FCA and Peugeot (PSA) which today will officially announce the birth of the fourth global automotive group. Also on the same day, FCA released the accounts for the first 9 months, confirmed the 2019 targets and improved the forecasts for 2020.
The yes to the merger came Wednesday, a few hours after the first rumors of the Wall Street Journal on marriage between the house of the Agnelli-Elkann family and that of the Peugeots, two historical families of European capitalism, with the favorable pronouncement of the board of directors of the French group first and of the Italian-American one in the evening. The merger, all for card against card, will be evenly matched.
The Portuguese Carlos Tavares will be the CEO of the new group and John Elkann the president: last Sunday they met in Paris for four hours. Thus it was born a colossus worth 40 billion euros and producing 8,7 million cars bringing together the Fiat, Alfa Romeo, Chrysler, Jeep, Lancia, Maserati, Dodge, Peugeot, Opel brands. The headquarters of the new group, which will be ready for Christmas, will be in Amsterdam
FCA is considering the possibility of distributing a extraordinary dividend of 5 billion to its shareholders while Psa could create a spin-off of one of its component companies.
The flash marriage between the two car manufacturers, which began in the summer after the failure of the marriage between FCA and Renault due to heavy interference from the French government, he sent the stocks into ecstasy on the stock exchange: in Piazza Affari FCA gained 9,53% yesterday reaching a value of 12,87 euros per share and also dragging the holding company Exor upwards (+4,6%), while Psa made progress on the Stock Exchange Paris by 4,53% reaching 26 euros per share.
This time the minority presence of the French government and the Chinese of Dongfeng in the capital of Peugeot they don't look set to get in the way of megafusion. Appreciation without interference was expressed by the Italian Government.
Beyond their respective market shares in Europe, FCA brings its strong presence on the American market as a dowry, PSA that in Asia and the robust investments made in the electric car.
QUARTERLY RESULTS: INCREASING PROFIT, RECORD EBIT
In the meantime Fiat Chrysler has also published its third quarter accounts which closed with a loss of 179 million due to 1,4 billion of extraordinary write-downs but recorded an adjusted margin (at 7,2%) and an adjusted EBIT at record levels, driven by a more favorable mix and better prices, despite lower deliveries: in particular, the adjusted Ebit is close to 2 billion dollars, with a growth of +5% compared to the same period of 2018, with the adjusted net profit at 1,262 billion (+6%). The novelty is the great contribution of North America to this result: only that area recorded an adjusted EBIT of 2 billion euro and a margin of 10,6%. On the other hand, the performance in the EMEA area was slightly less good, with net revenues down by 6% mainly due to the effect of lower volumes and a decrease in adjusted EBIT for the same reason, but also due to the negative price effect and the increase in regulatory and product costs.
Going globally, industrial free cash flow rose to $178 million euros, net of investments of 2,2 billion, according to the business plan. Overall global shipments were 1.059.000 vehicles in the quarter, down 9%, primarily due to continued inventory discipline at the North American network. Fca has confirmed the targets for the current year: “The positive momentum that we have been able to maintain in recent quarters solidifies our confidence in the ability to meet the objectives for 2019,” explains the note.
Also among the novelties of the period Maserati's updated product plan, with all new models featuring a full battery electric propulsion system; The memorandum of understanding with Terna, operator of the Italian high voltage transmission grid, for the joint experimentation of sustainable mobility services and technologies, such as vehicle-to-grid which allows electric vehicles to interact with the electricity grid via a "smart" charging infrastructure ; and the extension to 2024 of the duration of the Joint Venture with Credit Agricole Consumer Finance in FCA Bank.
“The strong results of the third quarter – he commented CEO Mike Manley -, built on the record performance of North America, allow us to confirm the targets for the year and look to a better 2020 in terms of financial performance. Furthermore, changes to product portfolio plans are central to the performance improvement strategy in EMEA and Maserati.”
