French want PSA-FCA board control guarantee in merger, report says

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PARIS/MILAN — French shareholders in the prepared merger of PSA and Fiat Chrysler are searching for reassurances that they will keep a numerical gain on a mixed board if CEO Carlos Tavares ended up to go away, two resources shut to PSA explained to Reuters.

The two providers are finalizing talks immediately after asserting a system for a $50 billion merger of equals in Oct that would make the world’s fourth-biggest automaker.

Below the phrases of the draft Memorandum of Comprehending (MoU), PSA and Fiat Chrysler would each individual have 5 seats on the board of the merged entity.

An eleventh seat would go to Tavares, who is CEO of PSA and is established to consider on the very same position in the new team.

French shareholders look at the seat held by Tavares as offering them the de-facto position of senior associates and want to know this gain would be preserved in the occasion of him leaving, the resources explained to Reuters on Friday.

There is no proof that the problem has surfaced in talks as an impediment to the offer and a supply shut to FCA stated the draft arrangement around the new group’s governance was not becoming questioned and that there was no problem delaying the offer.

PSA, the maker of Peugeot and Citroen, has known as a conference of its supervisory board for Tuesday which could talk about the FCA offer, two independent resources experienced stated.

Both equally corporations have stated they ended up self-confident of achieving a merger offer by the close of the 12 months, but the resources stated the French associates ended up searching for clarification on the problem just before a memorandum sealing the offer is signed.

Shareholder advisory corporation Proxinvest stated in a take note that the French group’s shareholders ended up having to pay “an implicit manage high quality (…) although there was no genuine manage of PSA on FCA.”

PSA, the BPI community expenditure lender symbolizing the French government’s shareholding and FCA, declined to remark.

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