The merger between Fiat Chrysler (NYSE:FCAU) and Peugeot (OTC: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.
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.