The employees of Faurecia had expected it, the shock is still rough.
The marriage between PSA and Fiat-Chrysler
, unveiled last week, materializes a scenario that has been emerging for several years: the French manufacturer, to finance the operation, will disengage from the equipment manufacturer, which he holds 46.3% of the capital and 63.1% rights of vote. These shares will be distributed to PSA shareholders as part of the financial package accompanying the merger.
The links between the two companies went back more than two decades, Faurecia being the equipment manufacturer of the Maison Peugeot. But Carlos Tavares, the boss of PSA, did not hide: his group needed to grow, and the stake in Faurecia, one of the two major French equipment manufacturers with Valeo, was among the assets to be minted the day come for achieve it.
This eventuality becomes reality opens a period agitated for the company. Faurecia loses control shareholder when OEMs face
the car market downturn
and technological revolutions that require heavy investment.
In recent months, several industry leaders such as Continental or Plastic Omnium have issued warnings on results and announced layoff plans. The slightest misstep is punished on the stock market. Out of the fold of PSA, Faurecia will be more vulnerable to a financial raid or a hostile takeover bid.
Hard core embryo
At the end of the transaction, the three main shareholders of PSA (the Peugeot family, the Public Investment Bank and the Chinese Dongfeng) will each hold between 5% and 6% of the capital of Faurecia, which could form an embryo hard core. But there is no clause in the agreement prohibiting them from selling their titles.
More broadly, the merger between PSA and Fiat Chrysler could become bad news for equipment manufacturers, since it will reduce the number of potential customers, and thus increase the pressure on prices.
In this turbulent environment, Faurecia, with annual revenues of € 17.5 billion a year, is fortunate. Its fundamentals seem solid, as shown
historically good results
for the year 2018 with an operating margin of 7.3%. Despite a delicate third quarter, the group led by Patrick Koller has just confirmed its financial objectives for the current year.
Nor does he blame an excessive dependence on his future ex-shareholder, who is "only" his fourth client, the first being the Volkswagen group. Faurecia therefore seems well equipped to face the turbulence ahead, starting with the uncertain timing of the finalization of the union between PSA and Fiat-Chrysler.