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With the gradual shrinkage of the automobile market in recent years and the increasingly fierce competition, many automobile companies began to seek strategic cooperation of "huddling". For example, PSA Collective and FCA Group announced as early as last year that they would merge. However, there is news recently that the two companies are not merged, but acquired by the acquirer PSA Group.

According to a Stellantis group document exposed by European Automotive News, one of them points out that the merger will be accounted for using the acquisition accounting method in accordance with IFRS 3, Business consolidation (IFRS 3), which requires the identification of the merged party and the merged party. Based on the evaluation of the indicators under IFRS 3 and all relevant facts and circumstances, FCA and PSA management determined that PSA was an acquirer for accounting purposes. Therefore, the merger is regarded as a reverse takeover.

In addition, there are some clues from the Stellantis Group's prospectus. Among the 11 members of the board of directors of Stellantis, 6 are from the PSA Group, which means that the directors of the FCA Group are in a minority and will also be led by the directors of the PSA Group in some future decisions. At the same time, the first CEO of Stellantis will also be Carlos Tavares, the current CEO of PSA Group.

Neither PSA Collective nor FCA Group has made any reply or clarification on the above content.

For a long time, both PSA and FCA have announced that the cooperation between them to create Stellantis is a "merger of equals". On December 18, 2019, PSA Group and FCA Automotive Group formally signed a binding joint agreement, which aims to facilitate the completion of the merger of the two groups, in which PSA Group and FCA Automotive Group each own 50% of the shares.

In May this year, the PSA Group and the FCA Group once again confirmed that the project of "realizing the comprehensive merger of the businesses of the two enterprises at 50:50 shares" is progressing smoothly, and that the antitrust declaration involving the project and other related work filed with the regulatory authorities are also progressing in an orderly manner. Depending on the usual closing conditions, the merger is expected to be completed in the first quarter of 2021 as scheduled.

The two sides jointly announced in July this year that the name of the new group after the merger will be "STELLANTIS". Its "STELLANTIS" will be used exclusively as the official name of the new combined group, which will become the fourth largest automobile group in the world with annual sales of 8.7 million units.

According to the plan, the merger of the two groups will have ultra-luxury, luxury, mainstream passenger car brands, as well as complementary products and brand combinations such as pick-up trucks and light commercial vehicles, which will give the new group a balanced and profitable global layout. The new group will own Peugeot, Citroen, DS, Opel, Vauxhall, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati, RAM and SRT.

Recently, Carlos Tavares, CEO of Peugeot-Citroen, also said that the merger was going according to plan. "so far, everything has gone well and many of the complex tasks have been completed." After the merger, the group will also make improving its performance in China one of its main tasks.

However, with the emergence of the true purpose of this merger, the STELLANTIS Group will inevitably be dominated by PSA in the future, and the layout of the product formation is likely to be the first to reduce the automobile brand under FCA.

According to the latest results released by the two major groups, FCA Group reported a net income of 20.567 billion euros in the first quarter, a net loss of 1.7 billion euros in continuing operations and an adjusted net loss of 500 million euros. As of March 31, 2020, the available liquidity of the Group is 18.6 billion euros. Global sales were 818000, down 21% from a year earlier.

And PSA Group released first-quarter 2020 results show that the group's first-quarter revenue of 15.179 billion euros, down 15.6% year-on-year. Among them, the PSA automobile business segment achieved revenue of 11.934 billion euros in the first quarter, down 15.7% from the same period last year, while sales fell to 627000 vehicles.

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