Fiat Chrysler Shares Decline on Dividend Payout Withdrawal
Fiat Chrysler Automobiles (FCAU) and PSA Groupe, owner of Peugeot S.A., said in a joint statement that they each decided to scrap their planned ordinary dividend on 2019 results due Read More... The post Fiat Chrysler Shares Decline on Dividend Payout Withdrawal appeared first on TipRanks Financial Blog.
Fiat Chrysler Automobiles (FCAU) and PSA Groupe, owner of Peugeot S.A., said in a joint statement that they each decided to scrap their planned ordinary dividend on 2019 results due to the impact of the coronavirus pandemic. Shares in Fiat Chrysler dropped 3.7% to $7.60 in U.S. trading.
At the end of last year, Fiat Chrysler Automobiles and PSA had announced a 1.1 billion euro ($1.19 billion) ordinary dividend for both.
The cash preservation measure comes as the two automakers at the end of last year entered into a proposed merger agreement to create the world’s fourth-largest automaker with a combined market value of about $50 billion.
Large corporates from General Motors (GM) to Royal Dutch Shell have in recent weeks cut dividend payout plans to shareholders to preserve their cash coffers as they grapple with the financial fallout caused by the lockdown orders implemented by governments around the world to contain the fast spread of the coronavirus pandemic. Car makers have posted large losses as the stay-at-home orders have forced a shutdown of their showrooms and led to production disruptions.
The two automakers updated investors that “preparations for the 50/50 merger of their businesses are advancing well, including with respect to antitrust and other regulatory filings.”
In addition, the two companies said they were on track to complete the proposed merger before the end of the first quarter of 2021, subject to customary closing conditions.
EU antitrust regulators said this week that a decision about the merger will be announced by June 17.
The coronavirus pandemic has wiped off almost 50% of Fiat Chrysler’s share value so far this year.
Overall Wall Street analysts are cautiously optimistic about Fiat Chrysler’s stock. The Moderate Buy consensus consists of 4 Buys, 2 Holds and 1 Sell. The $10.80 average price target indicates shares have room to soar 39% in the coming 12 months. (See Fiat Chrysler stock analysis on TipRanks).
Tesla’s California Auto Plant Gets Go-Ahead to Reopen Next Week
GM Plans To Reopen Lucrative Mexican Pickup Plant Next Week- Report
Boeing Gets No Orders in April, Customers Cancel 737 MAX Jets
The post Fiat Chrysler Shares Decline on Dividend Payout Withdrawal appeared first on TipRanks Financial Blog.