Fiat Chrysler and PSA gained EU antitrust approval at the end of December for their USD $38bn merger. Some days ago, the merger of FCA and Groupe PSA was also approved by the shareholders. FCA and Groupe PSA expect to complete the combination on January 16, 2021. Together the new company STELLANTIS will be the fourth largest car producer in the world.
1) Take a look at the last Annual reports of FCA and PSA (both 2019) and calculate the WACC for both companies separately. Compare your results from both companies with each other and interpret your results for 2019 and the third quarter of 2020.
If you cannot find all the information needed to calculate the WACC or the FCF in the annual reports, use recognized sources in addition to that. Please cite your sources and use screenshots to document your source of data.
2) Use the last annual report (2019) and the third quarter of 2020 in hand to obtain the figures needed in order to make a company valuation for FCA and PSA. Use Multiples/Comparables to value FCA and PSA. And interpret your results.
You may use the “vebidta Europe” Excel File from our Moodle Page and all other relevant documents you may need. If you cannot find all relevant information in the materials use recognized sources. Please cite your sources and use screenshots to document your source of data.
3) Were both companies affected by the Covid Crises? Use market capitalization of each company as an indicator and compare the different prices at the end of 2019 (31.12.2019) – in the middle of March (18.3.2020) and end of 2020 (31.12.2020) and interpret your results. Compare the performance of FCA and PSA to other car producers worldwide. Who has performed better, and what do you think are possible reasons for that, please be specific.
ISIN:NL0010877643 – Fiat Chrysler Automobilies ISIN: FR0000121501 – Peugeot S.A.
4) Fiat Chrysler shareholders collectively will receive a pre-merger dividend of $3.56 billion (2.9 billion euros). Initially, the deal called for a $6.75 billion (5.5 billion euro) dividend, but the Agnelli family agreed to cut that by $3.3 billion (2.6 billion euros) to give the combined company more cash for operations.
Is that a fair deal and does that make sense to you?
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