FCA, PSA revise merger terms due to COVID-19: source

PARIS (Reuters) – Carmakers PSA and Fiat Chrysler (FCA) have revised the terms of their planned merger, a source said on Monday, adding PSA would hold onto parts maker Faurecia and FCA would cut the cash portion of a 5.5 billion euro special dividend.

“The aim of those changes is to reinforce the balance sheet structure of both companies after the COVID-19 crisis and ensure that the merger plan is concluded as soon as possible,” the source said.

FCA will cut to 3 billion euros the cash portion of a special dividend its shareholders are set to receive under the terms of the merger accord, the source said.

France’s PSA, in turn, will scrap the spin-off of its 46% stake in Faurecia, the source added.

PSA was not immediately available for comment. FCA declined to comment.

(Reporting by Gilles Guillaume and Giulio Piovaccari; editing by Valentina Za)