De Brauw and Stibbe are advising on a major deal between Fiat Chrysler and Peugeot

The merger between Fiat Chrysler and PSA Groupe is complete, both automakers announced Wednesday. The headquarters of the fourth largest car company in the world will be in the Netherlands. De Brauw Blackstone Westbroek and Stibbe are the Dutch legal advisors on this major deal.

The merger between Fiat Chrysler Automobiles (FCA) and PSA Groupe will create a company that sells around nine million cars a year, with sales of around 170 billion euros.

It is not yet known what the name of the new company will be. In the list of the largest car manufacturers, only Volkswagen, Toyota and Renault-Nissan are ahead of the merged company. PSA Groupe has brands such as Peugeot, Citroën, DS and Opel. FCA includes Fiat, Alfa Romeo, Jeep, Dodge, Lancia and Maserati.

De Brauw Blackstone Westbroek and Stibbe are acting as co-advisors in the merger, which represents a company value of more than 40 billion euros. De Brauw is on the FCA side, with a team led by partners Paul Cronheim and Martin van Olffen, and also including Michael Schouten, Peter Nolten, Nathalie van Wiggen, Jaap Barneveld, Daan Gieben and Hendrik van ‘t Foort. Fiat Chrysler’s general counsel is the American firm of Sullivan & Cromwell.

PSA has Stibbe with it as legal advisor: team leader Björn van der Klip is supported by fellow partners Eva Das (company), Manon Cremers (corporate notary), Pieter Schutte (ECM), Jeroen Smits (tax) and Paul Vestering (employment). Stibbe partners Marc Habermehl, Lieke Stroeve, IJsbrand van Straten, Steven Hijink, Emilie Renardel de Lavalette, Ivo Nelissen, Cees Graafland, David de Groot, Maxim Terweij and Thijn de Jong also contributed to the initiative. Peugeot’s general counsel is the French office Bredin Prat.

The Netherlands as a neutral territory
Stibbe partner Björn van der Klip talks about ‘a very good transaction which shows that the Netherlands is still attractive as a neutral location for the merger of large international stock market companies’. “It was important for the negotiations not only that an agreement was reached between Peugeot and Fiat Chrysler on the terms and governance structure of the new combination, but also that the main shareholders of both parties supported the transaction. In the case of Fiat Chrysler this is Exor NV and in the case of Peugeot it is the Peugeot family, Bpifrance and Dongfeng Group.”

De Brauw partner Paul Cronheim describes it as ‘a very large, challenging and complex international transaction with many stakeholders in different countries and many legal and other issues’. “Key benefits include complex cross-border mergers, joint merger management including participation of employee representatives on the board, position of major shareholders and stock market listing. Usually, in that process, especially when companies with tens of thousands of employees are involved, all stakeholders are considered, including the works councils and the relevant authorities. It was a serious process but also a lot of fun, and it will continue to be so in 2020.

Fasting in twelve to fifteen months
Various competition authorities and shareholders have yet to formally agree to the deal. The merger is expected to be completed in twelve to fifteen months. The shareholders of each company will get 50% of the shares in the newly created company, which will be listed on the stock exchanges in New York, Paris and Milan.

According to PSA and FCA, the merger announced in October will result in annual cost savings of 3.7 billion euros. However, no factories will be closed. The merger partners say they want to use the money to comply with stricter regulations on greenhouse gas emissions. This is especially important for FCA, as the Italians so far have no answer to the explosive demand for electric vehicles. Thanks to the connection, they can now use their French skills in the area.

Filed Under: Deals, News