Fiat Chrysler Automobiles and PSA Group went out of their way to make their combination as equal as possible, throw out assets, pay special dividends and distribute board seats. It didn't take long for investors to find out who the buyer is.
Shares in Fiat Chrysler jumped 10 percent Thursday after the two sides announced the deal, billed as a 50-50 merger. The PSA fell by about the same amount and took the typical acquirer's hit.
The math carries it out. FCA shareholders will receive a nearly $ 5 billion ($ 5.6 billion) premium based on closing prices Tuesday, before reports of the talks, while both sides throw assets before throwing their remaining equity into the pot.
Adjusting for differences in market values and a dividend of 5.5 billion euros paid to Fiat Chrysler shareholders, "achieving a 50/50 shareholding indicates that PSA pays a 32 percent premium to take control of the FCA , "Jefferies analyst Philippe Houchois said in a note. [1[ads1]9659002] "PSA shareholders take on more market risk," he said.
Representatives of Fiat and PSA declined to comment.
As of Tuesday, PSA had a market capitalization of 22.6 billion euros. Before merging with the FCA, it will leave its shareholders stake of nearly € 3 billion in French sub-producer Faurecia, leaving about € 19.6 billion to contribute to the new company.
FCA shareholders will throw in at least EUR 5 billion less. The Italian-American company had a market value of 20 billion euros as of Tuesday. But before the deal is finalized, the carmaker will pinch around € 5.75 billion: along with the dividend, it will give shareholders its robot arm Comau, with an estimated value of around € 250 million.