, Columnist
Peugeot's Fiat Takeover Is Great for Some Investors
With the ECB restarting corporate bond purchases, it’s not a bad time for a carmaker to get bigger. The central bank loved VW, BMW and Daimler.
Big ideas.
Photographer: Stefan Wermuth/BloombergThis article is for subscribers only.
Peugeot SA’s equity holders might not think much of its takeover of Italy’s Fiat Chrysler Automobiles NV but bondholders appear to love the idea.
Fiat’s credit spreads (the extra yield above the benchmark) have tightened by as much as one-third after news of the deal emerged, accompanying a jump in the company’s share price. Peugeot’s shares fell sharply because of concerns about the premium it would have to pay, but the French company’s credit spreads modestly improved. It’s interesting that Peugeot’s shareholders and bondholders took such different views.