Billionaire Agnellis Grab a Massive Sweetener
Fiat has extracted a chunky premium for what is essentially a takeover by Peugeot. No wonder the latter's shareholders are unimpressed.
Special payment.
Photographer: Bloomberg
Fiat Chrysler Automobiles NV may have struck too fine a bargain with Peugeot SA. The Italian carmaker has extracted a chunky premium in exchange for agreeing a takeover that’s being dressed up as a merger. At first blush Peugeot’s shareholders aren’t convinced it’s worth it, and it’s not hard to see why they’re skeptical.
While there’s no binding deal yet, the terms have been set to ensure Fiat investors take more out of the combination than they put in. The company’s market value was already smaller than Peugeot’s going into the tie-up. Even so, its shareholders — with the billionaire Agnelli family the largest — would withdraw about 5.8 billion euros ($6.5 billion), mainly from a special dividend, before the carmakers come together. That further diminishes Fiat’s financial contribution to the enlarged group.