1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

1.3 Recent M&A in the Automotive Industry Mergers and acquisitions (M&A), including alliances, are common in the automotive industry as in other sectors. Regardless of sectors, some M&A are successful and others not. The most famous of failed M&A was that of Daimler–Chrysler and General Motors (GM)–Fiat. On the other hand, some acquisitions have been very successful, e.g. those of Porsche and Skoda, both acquired by Volkswagen. 2.1 Economic Benefits The new combined company would be the fourth largest company in the automotive industry by volume, with proposed annual sales of 8.7 million units, and third by revenue, with projected combined revenues of nearly € 170 billion. The first three positions in the automotive industry are occupied by automakers (each including several brands) with volumes over 10 million units – the Volkswagen Group, Renault- Nissan-Mitsubishi Alliance and Toyota. In the fifth position would be General Motors followed by Hyundai-Kia, Ford and Honda as the only automakers with volumes over 5 million cars per year each. The main synergies of scale of the combined automaker could be seen in the cheaper platforms produced by them for their cars (the main two platform types for approximately 3 million cars per year each). The combined company would have the broad and complementary brand portfolio of fourteen brands, including one luxury brand, two premium and two truck/LCV brands. The combined company would have a stronger position in various markets, mainly those of Europe and North America. Today, FCA has a strong position in North America, and PSA has a strong position in Europe. The result of the combination should be a strong position in the whole North Atlantic region. The combined balance sheet will be stronger, and research & develop and capital expenditures will be similar 2. Combination of FCA and PSA

to that of other big automakers. 2.2 Approval of the Merger

Both companies, PSA and FCA, have signed a binding combination agreement for the merger. Both parties completed due diligence processes and obtained approvals from labour councils and/or labour unions. Both companies are going to convene extraordinary general meetings for their shareholders to approve this transaction.

3. Corporate Governance

3.1 Shareholder Structure Like many other automakers (e.g. Volkswagen), Fiat Chrysler Automobiles N.V. and Peugeot S.A. also have their own specific corporate governance connected with significant family ownership, i.e. concentrated ownership. This concentrated ownership

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