Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Fiat Chrysler's $3.4 Billion Merger Dividend Is Now Unconditional

By Rich Duprey - Jan 13, 2021 at 9:32AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The final steps have been taken, and the payout is expected to be issued to shareholders this Friday.

The merger between Fiat Chrysler ( FCAU ) and Peugeot ( PUGOY ) has cleared all the necessary corporate steps that the companies needed to complete the deal, which makes the dividend Fiat is paying its shareholders unconditional.

Fiat had said it would pay investors 2.9 billion euros, or about $3.4 billion, before the merger was completed, but it was conditioned on Fiat and Peugeot finishing the deal. They expected that to occur by Jan. 13, which it has, so Fiat announced the dividend will be paid on Friday, Jan. 15.

Line of Fiat 500's charging

Fiat 500s being recharged. Image source: Fiat Chrysler.

The new company that will emerge from the merger will be called Stellantis, which is supposedly derived from the Latin verb stello, meaning "to brighten with stars." The company's stock will trade on the NYSE and foreign stock exchanges.

Fiat had originally proposed paying its shareholders 5.5 billion euros, but Peugeot balked at the amount, saying it was too rich considering the depressed state of the industry during the COVID-19 pandemic. 

The Federal Reserve Bank of St. Louis reports that the country's seasonally adjusted annual sales rate for autos as of the end of November, the latest data available, was just under 2.9 million vehicles for 2020, a 15% decline from the 3.4 million sold in 2019. But that was markedly improved from the 33% decline registered last March at the start of the coronavirus outbreak.

Fiat and Peugeot believe the merger will put them on a scale with Toyota and Volkswagen as they invest in cleaner vehicles. By streamlining operations to reduce costs and improve profits, management aims to boost shareholder returns.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Fiat Chrysler Automobiles N.V. Stock Quote
Fiat Chrysler Automobiles N.V.
Peugeot S.A. Stock Quote
Peugeot S.A.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.