Stellantis (STLA) F-4/ARegistration of securities (foreign) (amended)

FCA has filed a registration statement on Form F-4, as amended, to register with the SEC the FCA common shares to be issued in the merger. This prospectus is a part of the registration statement on Form F-4. As permitted by rules and regulations of the SEC, this prospectus does not contain all the information included in the registration statement. You should refer to the registration statement on Form F-4 (file no. 333-240094), as amended, for information omitted from this prospectus.

A separate prospectus prepared in accordance with Article 3 of the Prospectus Regulation, subject to the approval of the AFM and passported into France and Italy in accordance with applicable laws, will also be made available to the public in connection with the merger in accordance with the Prospectus Regulation and applicable Dutch, Italian and French laws. In addition, separate materials will be made available to shareholders of FCA and PSA in accordance with applicable Dutch and French laws in connection with the extraordinary general meetings of shareholders of FCA and PSA to be held on [●]. Such materials will set forth the proposals on which shareholders of PSA and FCA will be asked to vote in connection with the merger at their respective extraordinary general meetings.

The SEC allows FCA to “incorporate by reference” important business and/or information in this prospectus that has been previously filed with or furnished to the SEC in other documents, which means that FCA can disclose important information to you by referring you to those documents. Incorporated documents are considered part of this prospectus, and information in this prospectus automatically updates and supersedes information in earlier documents that are incorporated by reference in this prospectus, and information filed with or furnished to the SEC after the date of this prospectus automatically updates and supersedes information in this prospectus.

FCA incorporates the following documents in this prospectus by reference:

FCA also incorporates by reference in this prospectus each of the following documents that FCA files with the SEC after the date of this prospectus until the later of the date of PSA’s extraordinary shareholders’ meeting or the date of FCA’s extraordinary shareholders’ meeting:

In the event of conflicting information in this prospectus in comparison to any document incorporated by reference into this prospectus, or among documents incorporated by reference, the information in the latest filed document prevails.

You should rely only on the information contained in, or incorporated by reference into, this prospectus to vote on the merger. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this prospectus. This prospectus is dated [●], 2020. You should not assume that the information contained in, or incorporated by reference into, this prospectus is accurate as of any date other than that date, or the date of such information incorporated by reference.

A: The merger is a business combination transaction in which PSA will merge with and into FCA, and FCA, renamed as Stellantis, will continue as the sole surviving company and will succeed to all of the assets and liabilities of PSA. The merger of PSA into FCA will be effective (the “Effective Time”) at 00:00 a.m. Central European Time on the first day after the date on which a Dutch civil law notary executes a notarial deed of cross-border merger with respect to the merger between FCA and PSA in accordance with applicable Dutch and French law. If the merger is completed, Stellantis common shares will continue to be listed on the NYSE, and the MTA organized and managed by Borsa Italiana S.p.A., where the FCA common shares are currently listed, and will also be listed on Euronext Paris, where the PSA ordinary shares are currently listed.

At the Effective Time, the PSA ordinary shares will no longer be outstanding and automatically cease to exist, and each issued and outstanding FCA common share will remain unchanged as one common share in FCA. Therefore, if you own FCA common shares you will continue to hold those common shares after the merger.

A: As merger consideration, PSA shareholders will receive a fixed number of FCA common shares, not a number of shares that will be determined based on any fixed market value. The market value of FCA common shares and the market value of PSA ordinary shares at the Effective Time may vary significantly from their respective values on the date that the combination agreement was executed or at other dates, such as the date of this prospectus or the dates of the shareholder meetings of FCA and PSA. Share price changes may result from a variety of factors that are beyond the control of FCA or PSA, including changes in their respective businesses, operations or prospects, regulatory considerations, legal proceedings or in the general business, market, industry or economic conditions. The exchange ratio will not be adjusted for changes in the value of FCA common shares or PSA ordinary shares or for changes in the relative value of the businesses of FCA and PSA before the merger is completed.

However, the exchange ratio of 1.742 will be appropriately adjusted to provide to the shareholders of both PSA and FCA the same economic effect as contemplated by the combination agreement in the event that the outstanding PSA ordinary shares or FCA common shares change into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination, consolidation or exchange of shares, or any similar event prior to the Effective Time.

A: FCA common shares are currently listed on the NYSE and on the MTA. FCA will apply to list supplementally the Stellantis common shares to be issued in the merger on the NYSE and on the MTA. FCA will also apply for admission to listing and trading of the Stellantis common shares on Euronext Paris. The admission to listing and trading on Euronext Paris is expected to occur prior to the merger, subject to the approval of the competent authorities.

A: The FCA common shares issued as part of the merger and represented by the book-entry positions referred to below, will be issued and allotted to Cede & Co, as nominee for DTC, for inclusion in the centralized depositary and clearing systems of DTC and Euroclear France, and ultimately, directly or indirectly, on behalf and for the benefit of the former holders of PSA ordinary shares.

Depending on each PSA shareholder’s custodian/depositary, the book-entry positions representing FCA common shares should be visible in the securities accounts of the PSA shareholders between the first business day following the Effective Time and the effective delivery date of the positions in Euroclear France (which is expected to be the third business day after the Effective Time).

A: Neither FCA shareholders nor PSA shareholders are entitled to exercise dissenters’, appraisal, cash exit or similar rights in connection with the merger.

A: Yes. On October 23, 2020, the FCA Board carefully considered the proposed merger and unanimously recommended that FCA shareholders vote in favor of the merger and the transactions contemplated by the combination agreement. On October 27, 2020, the PSA Supervisory Board carefully considered the proposed merger and unanimously recommended that PSA shareholders vote in favor of the merger and the transactions contemplated by the combination agreement.

During the one-month waiting period following the filing of the Cross-Border Merger Terms with the Dutch Trade Register and the announcement of the filing, FCA’s creditors whose claims precede the registration of the Cross-Border Merger Terms with the Dutch Trade Register may file an opposition to the merger before the Amsterdam District Court.

A: The tax consequences of the merger for any particular shareholder will depend on the shareholder’s particular facts and circumstances. Moreover, the description below and elsewhere in this prospectus does not relate to the tax laws of any jurisdiction other than the United States, the Netherlands, the United Kingdom, France and Italy. Accordingly, shareholders are urged to consult their tax advisors to determine the tax consequences of the merger to them in light of their particular circumstances, including the effect of any state, local or national law.

It is intended that, for U.S. federal income tax purposes, the merger will generally qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the rules and regulations therein (the “Code”). However, the completion of the merger is not conditioned on the merger qualifying as a “reorganization” within the meaning of Section 368(a) or upon the receipt of an opinion of counsel to that effect. In addition, neither PSA nor FCA intends to request a ruling from the IRS regarding the United States federal income tax consequences of the merger. Accordingly, even if PSA and FCA conclude that the merger qualifies as a “reorganization” within the meaning of Section 368(a), no assurance can be given that the IRS will not challenge that conclusion or that a court would not sustain such a challenge.

Assuming that the merger is treated as a “reorganization” within the meaning of Section 368(a) of the Code:

For holders of PSA ordinary shares that are tax residents or carry out certain activities in the Netherlands the exchange of PSA ordinary shares into Stellantis common shares pursuant to the merger is, under Dutch law, considered a disposal of such holders’ PSA ordinary shares for Dutch income tax and Dutch corporate tax purposes. Such disposal will result in the recognition of a capital gain or a capital loss. As a consequence of the United Kingdom leaving the European Union (“Brexit”) and depending on the outcome of the Brexit negotiations, such PSA shareholders may not be able to apply a roll-over facility for the recognized capital gain. If the roll-over facility may be applied, the Stellantis common shares received as merger consideration must be reported in the balance sheet for Dutch tax purposes at the same tax book value as the divested shares in PSA.

For PSA shareholders who are resident in France for tax purposes, the exchange of PSA ordinary shares into Stellantis common shares should be considered as a disposal of such holders’ PSA ordinary shares for French tax purposes.

The merger should not trigger any registration duties or financial transaction tax in France for the PSA shareholders.

For Italian income tax purposes, the exchange of PSA ordinary shares into Stellantis common shares pursuant to the merger is not expected to trigger any taxable event for Italian resident shareholders. Stellantis common shares received by the Italian holders of PSA ordinary shares upon the merger will have the same aggregate tax basis as the PSA ordinary shares held by such Italian holders had before the merger.

A: The extraordinary general meeting of the FCA shareholders will be held on [●], 2020, beginning at [●] (Central European Time) at [the offices of Freshfields Bruckhaus Deringer LLP, Strawinskylaan 10, 1077 XZ Amsterdam, the Netherlands]. The extraordinary general meeting of the PSA shareholders will be held on [●], 2020, beginning at [●] (Central European Time) at [●]. A special meeting of the PSA shareholders entitled to double voting rights will also be held on [●], 2020, beginning at [●] (Central European Time) at [●].

A: The FCA shareholders will be asked to consider and vote, among other things, on the following resolutions at the extraordinary general meeting of the FCA shareholders:

The PSA shareholders will be asked to consider and vote, among other things, on the following resolutions at the extraordinary general meeting of the PSA shareholders and at the special meeting of the PSA shareholders entitled to double voting rights:

A: The FCA share record date is [●], 2020, which is the 28th day prior to the date of the meeting. Holders of FCA common shares on the FCA share record date are entitled to attend and vote at the FCA extraordinary general meeting. Holders of FCA common shares may appoint a proxy holder to vote on their behalf.

The PSA share record date is [●], 2020, which is two business days prior to the date of the shareholder meetings. Holders of PSA ordinary shares on the PSA share record date are entitled to attend and vote at the extraordinary general meeting of the PSA shareholders and holders of PSA ordinary shares with double voting rights are entitled to attend and vote at the special meeting of the PSA shareholders. Holders of PSA ordinary shares may appoint a proxy holder to vote on their behalf.

A: The FCA share record date and the PSA share record date are earlier than the date of the extraordinary general meeting of FCA and the extraordinary general meeting and special meeting of PSA, respectively, the date of the special meeting of the PSA shareholders entitled to double voting rights and the date on which the merger is expected to be completed. If you transfer or sell your FCA common shares or PSA ordinary shares after the relevant share record date but before the relevant extraordinary general meeting or special meeting, as the case may be, you will retain your right to vote at the extraordinary general meeting and the special meeting, as the case may be. However, if you are a PSA shareholder, you will have transferred the right to receive the merger consideration in the merger. In order to receive the merger consideration, you must hold your PSA ordinary shares through the Effective Time. If you acquire FCA common shares or PSA ordinary shares after the relevant record date but before the extraordinary general meeting of FCA and the extraordinary general meeting and special meeting of PSA, respectively, you will not be able to exercise the voting rights attached to such shares at the respective meetings.

A: No quorum requirements apply to the extraordinary general meeting of the FCA shareholders. At an extraordinary general meeting of the FCA shareholders, resolutions are adopted with an absolute majority of the votes validly cast. Abstentions and broker non-votes will not be counted as votes “IN FAVOR” nor as votes “AGAINST” the proposal. However, if less than one half of the issued and outstanding share capital of FCA is present or represented at the meeting, the resolution upon the merger must be adopted with a majority of at least two-thirds of the votes cast.

As of October 27, 2020, FCA directors and executive officers and their affiliates held and were entitled to vote approximately 0.16 percent of the shares entitled to vote at the extraordinary general meeting of FCA shareholders.

As of October 27, 2020, Exor owned 28.55 percent of the issued and outstanding common shares of FCA and 44.41 percent of the voting rights. Exor has agreed to vote all its FCA common shares in favor of the merger.

A: At least 25 percent of the shares carrying voting rights are required to constitute a quorum for the extraordinary general meeting of the PSA shareholders when the meeting is convened for the first time. At least 20 percent of the shares carrying voting rights are required to constitute a quorum when an extraordinary shareholders’ meeting is reconvened. At an extraordinary general meeting of the PSA shareholders, resolutions are adopted with a two-thirds majority of the votes cast by the shareholders present or represented. Votes cast at the extraordinary general meeting of PSA shareholders include votes with respect to PSA ordinary shares carrying double voting rights, but do not include voting rights attached to the PSA ordinary shares for which shareholders did not take part in the vote, abstained, or returned a blank or invalid vote.

At least one third of the shares carrying double voting rights are required to constitute a quorum for the special meeting of the PSA shareholders when the meeting is convened for the first time. At least 20 percent of the shares carrying double voting rights are required to constitute a quorum when the special meeting is reconvened. At a special meeting of the PSA shareholders, resolutions are adopted with a two-thirds majority of the votes cast by the shareholders present or represented. Votes cast at a shareholder meeting do not include voting rights attached to the PSA ordinary shares for which shareholders did not take part in the vote, abstained, or returned a blank or invalid vote.

As of October 31, 2020, PSA directors and executive officers held and were entitled to vote 0.12 percent of the shares entitled to vote at the extraordinary general meeting and the special meeting of PSA shareholders. This percentage does not reflect the PSA ordinary shares held by EPF/FFP which may be deemed to be beneficially owned by Robert Peugeot and the PSA ordinary shares that FFP may acquire pursuant to an equity swap agreement with an investment services provider.

As of October 31, 2020, each of EPF/FFP and BPI owned 12.36 percent of PSA’s share capital, corresponding to approximately 18.01 percent of voting rights, and Dongfeng owned 11.24 percent of PSA’s share capital, corresponding to approximately 16.38 percent of voting rights. EPF/FFP, BPI, and Dongfeng have agreed to vote all their PSA ordinary shares in favor of the merger.

A: If FCA common shares are registered in your name as of the FCA share record date, you may vote in person, online or by means of a proxy in accordance with applicable law and the FCA articles of association:

Anyone acquiring FCA common shares subsequent to the FCA share record date will not be entitled to vote such shares at the extraordinary general meeting of FCA.

No voting materials will be mailed to you. In order to vote your FCA common shares and special voting shares at the extraordinary general meeting of FCA, you must either attend the extraordinary general meeting and vote in person, confer your proxy or vote online as directed above.

This prospectus is not a proxy statement and we are not asking you to deliver proxies to FCA or PSA.

A: If you hold PSA ordinary shares, either in registered or bearer form as of the PSA share record date, you may:

Anyone acquiring PSA ordinary shares subsequent to the PSA share record date will not be entitled to vote such shares at the extraordinary general meeting of PSA.

In accordance with the French commercial code, when a shareholder has already voted by mail or online, sent a proxy, or requested an admission card or a shareholding certificate to attend the shareholders’ meeting, such shareholder may no longer choose to participate in a different manner at the extraordinary general meeting or the special meeting of PSA shareholders entitled to double voting rights, as the case may be.

A: You should consult with your bank, broker or custodian as to whether you are required to pay brokerage commissions in connection with the exchange of your PSA ordinary shares.

A: If a record holder of FCA common shares does not cast his or her vote in any permitted fashion, no votes will be cast on behalf of such holder on any of the items on the agenda of the extraordinary general meeting of FCA. If a beneficial owner of FCA common shares does not instruct his or her bank, broker or custodian on how to vote on any of the proposal at the extraordinary general meeting of FCA in any permitted fashion, no votes will be cast on behalf of such beneficial owner with respect to such items on the agenda at the extraordinary general meeting of FCA.

If a record holder of PSA ordinary shares does not cast his or her vote in any permitted manner, no votes will be cast on behalf of such holder on any of the items on the agenda of the extraordinary general meeting and the special meeting of the PSA shareholders entitled to double voting rights, as applicable. If a holder of PSA ordinary shares does not instruct his or her bank, broker or custodian on how to vote on any of the proposal at the extraordinary general meeting or the special meeting, as applicable, in any permitted fashion, no votes will be cast on behalf of such beneficial owner with respect to such items on the agenda at the extraordinary general meeting or the special meeting, as applicable, of PSA.

A: The extraordinary general meeting of FCA will be held on [●], 2020, beginning at [●] (Central European Time) at [●]. If you are a FCA shareholder and you wish to attend the extraordinary general meeting of FCA in person you must request the authorized intermediary with whom your FCA common shares are deposited to deliver to FCA the communication certifying that the FCA common shares are registered in your name as of the FCA share record date.

The extraordinary general meeting of the PSA shareholders will be held on [●], 2020, beginning at [●] (Central European Time) at [●]. If you are a PSA shareholder and you wish to attend the extraordinary general meeting of PSA in person, you may request an admission card. If you hold registered shares, you may request an admission card by mail to Société Générale – Service des Assemblées – CS 30812 - 44308 Nantes Cedex 3, using the prepaid reply envelope enclosed with the invitation letter or by logging on to the website www.sharinbox.societegenerale.com with your usual login details. If you hold bearer shares, you may request an admission card through your authorized intermediary. If you hold bearer shares and have not received your admission card as of [●], 2020, you must request an individual certificate of attendance from your authorized intermediary.

The special meeting of the PSA shareholders entitled to double voting rights will be held on [●], 2020, beginning at [●] (Central European Time) at [●]. If you are a PSA shareholder with double voting rights and you wish to attend the special meeting of PSA shareholders in person, you may request an admission card. You may request an admission card by mail to Société Générale – Service des Assemblées – CS 30812-44308 Nantes Cedex 3, using the prepaid reply envelope enclosed with the invitation letter or by logging on to the website www.sharinbox.societegenerale.com with your usual login details.

A: FCA currently expects that all directors, executive officers and their affiliates who beneficially own FCA common shares will vote all of their FCA common shares (representing approximately 0.16 percent of the shares entitled to vote at the extraordinary general meeting of FCA shareholders as of October 27, 2020, without taking into consideration FCA share grants granted to the directors and executive officers) in favor of approval of the resolution to approve the merger plan and related matters.

If you hold your FCA common shares or PSA ordinary shares in “street name” through a broker or custodian, you must instruct your broker or custodian as to how to vote your FCA common shares and/or PSA ordinary shares using the instructions provided to you by your broker or custodian.

A: If you have any further questions about the merger or if you need additional copies of this prospectus, you can contact:

E-mail: investor.relations@fcagroup.com

E-mail: andrea.bandinelli@mpsa.com

This prospectus includes the audited consolidated financial statements of PSA as of and for the financial years ended December 31, 2019, 2018 and 2017, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and in accordance with IFRS as adopted by the European Union. There is no effect on these consolidated financial statements resulting from differences between IFRS as issued by the IASB and IFRS as adopted by the European Union. The audited consolidated financial statements of PSA and the notes to the audited consolidated financial statements of PSA are collectively referred to as the “PSA Consolidated Financial Statements”. In addition, this prospectus also includes the condensed interim unaudited consolidated financial statements of PSA at June 30, 2020 and for the six months ended June 30, 2020 and 2019, which have also been prepared in accordance with IFRS as issued by the IASB, and in accordance with IFRS as adopted by the European Union. The condensed interim unaudited consolidated financial statements of PSA together with the notes thereto are referred to as the “PSA Interim Unaudited Consolidated Financial Statements”.

This prospectus also incorporates by reference the audited consolidated financial statements of FCA as of and for the financial years ended December 31, 2019, 2018 and 2017, contained in the FCA 2019 Form 20-F, which have been prepared in accordance with IFRS as issued by the IASB, as well as IFRS as adopted by the European Union. There is no effect on these consolidated financial statements resulting from differences between IFRS as issued by the IASB and IFRS as adopted by the European Union. The audited consolidated financial statements of FCA together with the notes thereto are referred to as the “FCA Consolidated Financial Statements”. In addition, this prospectus also incorporates by reference the unaudited semi-annual condensed consolidated financial statements of FCA as of and for the six months ended June 30, 2020 and the unaudited interim condensed consolidated financial statements of FCA as of and for the three and nine months ended September 30, 2020, which have been also prepared in accordance with IFRS as issued by the IASB, as well as IFRS as adopted by the European Union.

All references in this prospectus to “euro” and “€” refer to the currency issued by the European Central Bank. The financial information is presented in euro. All references to “U.S. dollars”, “U.S. dollar”, “U.S.$” and “$” refer to the currency of the United States of America (“U.S.”).

The language of the prospectus is English. Certain legislative references and technical terms have been cited in their original language in order that the correct technical meaning may be ascribed to them under applicable law.

Certain totals in the tables included in this prospectus may not add due to rounding.

In this prospectus, we include, incorporate by reference or refer to industry and market data, including market share, ranking and other data, derived from or based upon a variety of official, non-official and internal sources, such as internal surveys and management estimates, market research, publicly available information and industry publications. Market share, ranking and other data contained or incorporated by reference in this prospectus may also be based on our good faith estimates, our own knowledge and experience and such other sources as may be available. Market share data may change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data-gathering process, different methods used by different sources to collect, assemble, analyze or compute market data, including different definitions of vehicle segments and descriptions and other limitations and uncertainties inherent in any statistical survey of market shares or size. Industry publications and surveys and forecasts generally state that the information contained in such publications, surveys and forecasts has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Although we believe that this information is reliable, we have not independently verified the data from third-party sources. In addition, FCA typically estimates its market share for automobiles and commercial vehicles based on registration data.

Furthermore, in light of the inherent difficulty in forecasting future results, any estimates or forecasts of particular periods that are provided in this prospectus are uncertain. Accordingly, investors should not place undue reliance on such forward-looking statements. Actual results could differ materially from those anticipated in such forward-looking statements. We do not undertake an obligation to update or revise publicly any forward-looking statements.

FCA is a global automotive group engaged in designing, engineering, manufacturing, distributing and selling vehicles, components and production systems worldwide through over a hundred manufacturing facilities and over forty research and development centers. FCA has operations in more than forty countries and sells its vehicles directly or through distributors and dealers in more than a hundred and thirty countries. FCA designs, engineers, manufactures, distributes and sells vehicles for the mass-market under the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia and Ram brands and the SRT performance vehicle designation. For its mass-market vehicle brands, FCA has centralized design, engineering, development and manufacturing operations, which allows it to efficiently operate on a global scale. FCA supports its vehicle shipments with the sale of related service parts and accessories, as well as service contracts, worldwide under the Mopar brand name for mass-market vehicles. In addition, FCA designs, engineers, manufactures, distributes and sells luxury vehicles under the Maserati brand. FCA makes available retail and dealer financing, leasing and rental services through its subsidiaries, joint ventures and commercial arrangements with third party financial institutions. In addition, FCA operates in the components and production systems sectors under the Teksid and Comau brands.

FCA common shares are currently traded on the NYSE and on the MTA organized and managed by Borsa Italiana S.p.A. FCA’s principal office is located at 25 St. James’s Street, London SW1A 1HA, United Kingdom (telephone number: +44 (0) 20 7766 0311). Its agent for U.S. federal securities law purposes is Christopher J. Pardi, c/o FCA US LLC, 1000 Chrysler Drive, Auburn Hills, Michigan 48326.

PSA is the second largest car manufacturer in Europe based on the volume of sold vehicles in 2019. It operates 17 production sites and five R&D hubs across the world, and has a presence in 160 countries, where it sells its vehicles and products through independent dealers and distributors, joint ventures and its network of wholly owned subsidiaries. PSA’s automotive division designs, engineers, manufactures, distributes and sells vehicles under its Peugeot, Citroën, DS, Opel and Vauxhall brands and provides spare parts and, after-sales, maintenance repair services. PSA’s finance division, which corresponds to the operations of Banque PSA Finance, is present in 17 countries and provides retail finance and insurance products to PSA’s customers, as well as wholesale financing to the brands’ dealer networks, primarily through two major partnerships in Europe, with Group Santander Consumer Finance and BNP Paribas Personal Finance. PSA’s automotive equipment division, which corresponds to the operations of Faurecia, manufactures and sells automotive equipment to other automotive original equipment manufacturers.

PSA’s ordinary shares are listed on Euronext Paris under the symbol “UG” and are part of the CAC 40 index. The principal executive offices of PSA are located at Route de Gisy, 78140 Vélizy-Villacoublay, France. PSA’s telephone number is +33 (0)1 55 94 81 00.

The terms and conditions of the merger are set forth in the combination agreement entered into by FCA and PSA on December 17, 2019, which is attached to this prospectus as Appendix A, as amended on September 14, 2020 by the combination agreement amendment attached to this prospectus as Appendix B. You should read the combination agreement and shareholders undertakings carefully as they are the legal documents that govern the terms of the merger.

If the merger is approved by the requisite votes of the FCA and PSA shareholders and the other conditions precedent to the merger are satisfied or, to the extent permitted under the combination agreement and by applicable law, waived, PSA will be merged with and into FCA, which will be renamed “Stellantis N.V.” on the day immediately following the date on which the closing of the merger occurs.

The merger will be effective at the Effective Time (00:00 a.m. Central European Time on the first day after the date on which a Dutch civil law notary executes a notarial deed of cross-border merger with respect to the merger between FCA and PSA in accordance with applicable Dutch and French law), at which time, the separate corporate existence of PSA will cease, and Stellantis will continue as the sole surviving corporation, and, by operation of law, Stellantis, as successor to PSA, will succeed to and assume all of the rights and obligations and other legal relationships, as well as the assets and liabilities, of PSA in accordance with Dutch law and French law. Pursuant to the combination agreement (and subject to applicable Dutch law and French law), the merger will be deemed to enter into effect retroactively as from the first day of the calendar year during which the Effective Time occurs.

At the Effective Time, by virtue of the merger and without any action on the part of any holder of PSA ordinary shares or FCA common shares, FCA will issue for each outstanding PSA ordinary share (other than any PSA ordinary share held in treasury by PSA or held by FCA, if any) 1.742 FCA common shares (the “Exchange Ratio”), the PSA ordinary shares will no longer be outstanding and automatically cease to exist and each issued and outstanding common share of FCA will remain unchanged as one common share in Stellantis. The Exchange Ratio is fixed and will not be adjusted for changes in the market value of FCA common shares or PSA ordinary shares.

Prior to the Effective Time (i) FCA intends to declare a cash distribution of €2.9 billion (the “FCA Extraordinary Dividend”) to be paid to its shareholders (with a record date prior to the closing of the merger, and which will be paid to such shareholders of record on a payment date as soon as practicable after the closing of the merger), (ii) an ordinary dividend for an amount of €1.1 billion (or a lower amount that represents the lowest maximum distributable amount of either party) in respect of the fiscal year ending December 31, 2019 may be paid by each of FCA and PSA and (iii) if the closing of the merger has not occurred before the 2021 annual general meetings of PSA and FCA, an ordinary dividend in respect of the fiscal year ending December 31, 2020 for an amount to be agreed by FCA and PSA on the basis of their respective distributable amounts, may be paid by each of PSA and FCA. On May 13, 2020 the parties decided that, in light of the impact from the COVID-19 crisis, neither FCA nor PSA will pay an ordinary dividend in 2020 relating to the fiscal year 2019. Following agreement between PSA and FCA, on October 29, 2020, PSA sold 9,663,000 ordinary shares of Faurecia, representing approximately seven percent of the share capital of Faurecia with proceeds of approximately €308 million. FCA and PSA intend that, promptly following the Effective Time, Stellantis will distribute to its shareholders through a dividend or other form of distribution (including through a reduction of the share capital of Stellantis) (i) its remaining Faurecia ordinary shares, representing approximately 39 percent of the share capital of Faurecia, and (ii) cash equal to the proceeds of the sale of the Faurecia ordinary shares described above, subject to any corporate approvals required in relation thereto (including the prior approval of the Stellantis Board and the Stellantis shareholders), which will be sought promptly following the closing of the merger. PSA has undertaken (i) to convert, prior to the closing, the manner in which it holds its remaining Faurecia ordinary shares, resulting in the loss of the double voting rights attached to such Faurecia ordinary shares and (ii) to cause its representatives on the board of directors of Faurecia to resign effective the day preceding the Effective Time, which will collectively eliminate PSA’s influence over Faurecia and result in a loss of control prior to the Effective Time. FCA and PSA have also undertaken that Stellantis will not exercise control over Faurecia following the closing of the merger. PSA has agreed that prior to the closing of the merger there will be no material changes in any currently existing commercial arrangements between PSA and Faurecia, other than amendments in the ordinary course, and that it will not effect the Faurecia Distribution prior to the closing of the merger. Pursuant to the combination agreement amendment, FCA and PSA have agreed that PSA will review with the PSA Managing Board and the PSA Supervisory Board and FCA will review with the FCA Board a potential distribution of €500 million to be paid by each party to its shareholders prior to the closing of the merger, but solely if such distribution is paid by both parties, or, in the alternative, a potential cash distribution of €1.0 billion to be paid by Stellantis to its shareholders following the closing of the merger.

The obligation of each party to effect the merger is subject to certain closing conditions, including:

In evaluating the merger, FCA shareholders and PSA shareholders should carefully review and consider the risk factors set forth under the section entitled “Risk Factors” beginning on page 28 of this prospectus. The occurrence of one or more of the events or circumstances described in those risk factors, alone or in combination with other events or circumstances, may adversely affect the combined group’s ability to complete or realize the anticipated benefits of the merger, and may have a material adverse effect on the business, cash flows, financial condition or results of operations of FCA, PSA or the combined group following the merger. These risks include the following:

Holders of PSA ordinary shares will vote on the merger at an extraordinary meeting of shareholders and a special meeting of shareholders entitled to double voting rights scheduled for [●] and [●], respectively. Separately, holders of FCA common shares will vote on the merger at an extraordinary meeting of shareholders scheduled for [●]. Subject to the satisfaction and/or waiver of the other conditions precedent contained in the combination agreement, the merger will not become effective unless (a) a resolution approving the merger is passed at (i) the extraordinary meeting of holders of PSA ordinary shares with a two-thirds majority of the votes cast by the shareholders present or represented at such meeting, provided that at least 25 percent of the PSA ordinary shares carrying voting rights are present or represented at the first convening of such meeting, or at least 20 percent of the PSA ordinary shares carrying voting rights are present or represented at the second convening of such meeting, and at (ii) the special meeting of PSA shareholders entitled to double voting rights with a two-thirds majority of the votes cast by the shareholders entitled to double voting rights present or represented at such meeting, provided that at least one-third of the PSA ordinary shares carrying double voting rights are present or represented at the first convening of such meeting, or at least 20 percent of the PSA ordinary shares carrying double voting rights are present or represented at the second convening of such meeting, and (b) a resolution approving the merger is passed at the extraordinary meeting of holders of FCA common shares with the affirmative vote of the holders of (i) a majority of the votes cast at the FCA shareholders’ meeting (provided that one half or more of the issued and outstanding share capital of FCA is represented at such meeting) or (ii) if less than one half of the issued and outstanding share capital of FCA is represented at the FCA shareholders’ meeting, at least two-thirds of the votes cast at such meeting. As of October 31, 2020, (a) EPF/FFP owned 12.36 percent of PSA’s share capital and 18.01 percent of the total voting rights of PSA, (b) BPI owned, directly and indirectly, 12.36 percent of PSA’s share capital and 18.01 percent of the total voting rights of PSA and (c) Dongfeng owned 11.24 percent of PSA’s share capital and 16.38 percent of the total voting rights in PSA. Each of EPF/FFP, BPI and Dongfeng has agreed to vote in favor of the merger. As of October 27, 2020, Exor owned 28.55 percent of FCA’s issued and outstanding common shares, and, based on the loyalty voting system of FCA, 44.41 percent of the total voting rights in FCA. Exor has agreed to vote in favor of the merger.

In connection with their respective extraordinary general meetings, separate materials will be made available to the shareholders of FCA and PSA in accordance with applicable Dutch and French law.

The FCA Board, having received extensive legal and financial advice, and having given due and careful consideration to the strategic and financial aspects and consequences of the merger, at a meeting held on December 17, 2019, unanimously approved the merger and, at a meeting held on September 14, 2020, unanimously approved amendments to certain of the terms of the merger. On October 23, 2020, the FCA Board unanimously resolved to approve the Cross-Border Merger Terms. Accordingly, the FCA Board supports and unanimously recommends the merger and recommends that FCA shareholders vote “FOR” adoption and approval of the Cross-Border Merger Terms and the transactions contemplated by the combination agreement.

The PSA Supervisory Board, having received extensive legal and financial advice, and having given due and careful consideration to the strategic and financial aspects and consequences of the merger, at a meeting held on December 17, 2019, unanimously approved the merger and, at a meeting held on September 14, 2020, unanimously approved amendments to certain of the terms of the merger. On October 27, 2020, the PSA Supervisory Board unanimously resolved to approve the Cross-Border Merger Terms. Accordingly, the PSA Supervisory Board supports and unanimously recommends the merger and recommends that PSA shareholders vote “FOR” adoption and approval of the Cross-Border Merger Terms and the transactions contemplated by the combination agreement.

The full text of the written opinion of Goldman Sachs International, dated December 17, 2019, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix C. Goldman Sachs International provided advisory services and its opinion for the information and assistance of the FCA Board in connection with its consideration of the merger. The Goldman Sachs International opinion is not a recommendation as to how any holder of FCA common shares should vote with respect to the merger or any other matter. Pursuant to an engagement letter between FCA and Goldman Sachs International, FCA has agreed to pay Goldman Sachs International a transaction fee of $35 million, $7.5 million of which became payable at the announcement of the combination agreement on December 18, 2019, and the remainder of which is contingent upon consummation of the merger.

The full text of d’Angelin’s written opinion, dated December 18, 2019, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by d’Angelin in delivering its opinion, is attached as Appendix D. d’Angelin’s financial advisory services and its opinion were provided for the information and benefit of the FCA Board (in its capacity as such) in connection with its evaluation of the proposed merger. d’Angelin’s opinion does not constitute a recommendation to the FCA Board or to any other person in respect of the merger, including as to how any holder of FCA common shares should vote or act with respect to the merger. Pursuant to the terms of d’Angelin’s engagement letter with FCA, FCA has paid or agreed to pay d’Angelin fees for its services with respect to the merger in the aggregate amount of approximately €6.5 million, €2 million of which became payable in connection with advice relating to the merger and the delivery of a fairness opinion and €4.5 million of which will become payable contingent upon completion of the merger.

The PSA Supervisory Board retained Perella Weinberg UK Limited (“Perella Weinberg”) to act as its financial advisor in connection with a potential transaction involving FCA. On September 14, 2020, Perella Weinberg rendered to the PSA Supervisory Board its oral opinion, subsequently confirmed in writing, that as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in their opinion, the Exchange Ratio provided for in the combination agreement, was fair from a financial point of view to the holders of PSA ordinary shares.

The full text of Perella Weinberg’s written opinion, dated September 14, 2020, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached to this Prospectus as Appendix E and is incorporated by reference in this prospectus. Holders of PSA ordinary shares are urged to read Perella Weinberg’s opinion carefully and in its entirety. Perella Weinberg’s opinion was addressed to the PSA Supervisory Board for information and assistance in connection with, and for the purposes of its evaluation of, the merger. Perella Weinberg’s opinion was not intended to be and does not constitute a recommendation to any holder of PSA ordinary shares or FCA common shares as to how such holders should vote or otherwise act with respect to the merger or any other matter.

Certain of the directors and executive officers of FCA may have interests in the merger that are different from, or in addition to, the interests of the FCA shareholders, which may include positions in Stellantis, treatment of equity awards, retention and severance arrangements, and directors’ and officers’ liability insurance. The FCA Board was aware of, and considered, these interests during its deliberations on the merits of the merger or approved the related arrangements in the context of the discussions regarding the merger.

Certain of the directors and executive officers of PSA may have interests in the merger that are different from, or in addition to, the interests of the PSA shareholders, which may include positions in Stellantis, treatment of equity awards, retention arrangements, and directors’ and officers’ liability insurance. The PSA Supervisory Board was aware of, and considered, these interests during its deliberations on the merits of the merger or approved the related arrangements in the context of the discussions regarding the merger.

The merger will be accounted for using the acquisition method of accounting in accordance with IFRS 3, Business Combinations (“IFRS 3”), which requires the identification of the acquirer and the acquiree for accounting purposes. Based on the assessment of the indicators under IFRS 3 and consideration of all pertinent facts and circumstances, FCA and PSA’s management determined that PSA is the acquirer for accounting purposes and as such, the merger is accounted for as a reverse acquisition.

The following unaudited pro forma condensed combined financial information included in this prospectus, which has been prepared using the historical consolidated financial statements of FCA and PSA, is presented for illustrative purposes only and should not be considered to be an indication of the results of operations or financial position of Stellantis following the merger.

The unaudited pro forma condensed combined financial information presented in this prospectus should be read in conjunction with the historical 2019 consolidated financial statements, and the unaudited interim condensed consolidated financial statements as of and for the six months ended June 30, 2020, of PSA and FCA, the accompanying notes thereto and the other information contained in or incorporated by reference into this prospectus.

The merger will be accounted for using the acquisition method of accounting in accordance with IFRS 3, which requires the identification of the acquirer and the acquiree for accounting purposes. Based on the assessment of the indicators under IFRS 3 and consideration of all pertinent facts and circumstances, FCA and PSA’s management determined that PSA is the acquirer for accounting purposes and, as such, the merger is accounted for as a reverse acquisition. In identifying PSA as the acquiring entity, notwithstanding that the merger is being effected through an issuance of FCA shares, the most significant indicators were (i) the composition of the combined group’s board, which is composed of eleven directors, six of whom are to be nominated by PSA, PSA shareholders or PSA employees, or are current PSA executives, (ii) the combined group’s first CEO, who is vested with the full authority to individually represent the combined group, and is the current president of the PSA Managing Board, and (iii) the payment of a premium by pre-merger shareholders of PSA.

The unaudited pro forma condensed combined statement of financial position as of June 30, 2020 gives effect to the merger, as well as, the FCA Extraordinary Dividend and the loss of control of Faurecia, as if they had occurred on June 30, 2020. The unaudited pro forma condensed combined statements of income for the six months ended June 30, 2020 and the year ended December 31, 2019 give effect to the merger and the loss of control of Faurecia as if they had occurred on January 1, 2019. As a consequence of the combination agreement amendment, it is currently expected that the Faurecia Distribution will occur promptly after closing following approval by the Stellantis Board and the Stellantis shareholders, and as such it is not considered directly attributable to the merger. The unaudited pro forma condensed combined statement of financial position does not reflect the payment of the €1.1 billion ordinary dividends contemplated by the combination agreement, due to the fact that on May 13, 2020, the parties decided that, in light of the impact from the COVID-19 crisis, neither FCA nor PSA would pay an ordinary dividend in 2020 relating to the fiscal year 2019. The pro forma condensed combined financial information is not adjusted for the potential distribution of €500 million which may be paid by each of FCA and PSA to their respective shareholders prior to the Effective Time as it is not directly attributable to the merger because it is subject to the performance of FCA and PSA leading up to the Effective Time. The pro forma condensed combined financial information is also not adjusted for the effects of the separation of Comau, as it is considered neither directly attributable to the merger because it is subject to decision by the Stellantis Board after the closing of the merger, nor a significant subsidiary.

The unaudited pro forma condensed combined financial information is prepared in accordance with Article 11 of SEC Regulation S-X. The unaudited pro forma condensed combined financial information is illustrative and is not intended to represent or be indicative of the consolidated results of operations or financial position that would have been reported had the merger been completed as of the dates presented, and should not be taken as representative of the future consolidated results of operations or financial position of the combined group following the merger. The actual financial position and results of operations of the combined group following the merger may differ significantly from the unaudited pro forma condensed combined financial information reflected herein due to a variety of factors. The unaudited pro forma condensed combined financial information is based upon available information and certain assumptions that management believes are reasonable.

In addition, the Faurecia Distribution is considered probable and significant. As such, the unaudited pro forma combined condensed statement of financial position as of June 30, 2020, after giving effect to the merger, has been further adjusted to reflect the intended Faurecia Distribution as if it had occurred on June 30, 2020.

The global spread of COVID-19 has significantly increased the volatility of prices and economic conditions in various markets around the world, affecting the determination of fair value measurements either directly or indirectly. Therefore, preliminary fair value estimates and the resulting preliminary goodwill may change as additional information becomes available, and some changes could be material, as certain valuations and other studies have yet to commence or progress to a stage where there is sufficient information for a definitive measurement.

Upon the closing of the merger, Stellantis common shares will be listed on the NYSE and the MTA organized and managed by Borsa Italiana S.p.A., where FCA common shares are currently listed, and on Euronext Paris, where PSA ordinary shares are currently listed.

Upon the consummation of the merger, PSA shareholders will be entitled to receive 1.742 FCA common shares for each PSA ordinary share that they own. This exchange ratio will not be adjusted for changes in the value of FCA common shares or the value of PSA ordinary shares, or for changes in the relative value of the businesses of FCA or PSA between the date of the combination agreement and the date of the closing of the merger. Share price changes may result from a variety of factors, including changes in their respective businesses, operations or prospects, regulatory considerations, legal proceedings or in the general business, market, industry or economic conditions. Market assessments of the benefits of the merger and of the likelihood that the merger will be completed, and related arbitrage activities, may also have an effect on share prices. If the value of FCA common shares relative to the value of PSA ordinary shares increases or decreases (or the value of FCA business increases or decreases relative to the value of the PSA business) prior to the effectiveness of the merger, the market value of the Stellantis common shares that shareholders will hold following the merger may be higher or lower than the relative values of their shares on a standalone basis at the date of the combination agreement, the date of this document or at the date of the extraordinary general meetings.

Before the merger may be completed, any waiting period (or extension of such waiting period) applicable to the merger must have expired or been terminated, and any competition approvals, consents or clearances required in connection with the merger must have been received, in each case, under the HSR Act, under the applicable competition laws of the European Union and under the competition laws of the following countries, where approvals remain outstanding at the date of this prospectus: the Republic of Chile, Ukraine, the Republic of Turkey and the Russian Federation. While clearance has been obtained in the Federative Republic of Brazil, a waiting period of 15 calendar days from the publication of a summary of the clearance decision must be observed before the decision is declared final, during which period the clearance decision could be challenged. The antitrust and other regulatory approval processes in certain jurisdictions may be impacted by the entry into the combination agreement amendment on September 14, 2020, which may potentially result in a delay in obtaining approvals in those jurisdictions. The Staff of the U.S. Federal Trade Commission advised that new filings are required to be submitted as a result of the revised terms of the merger. In the United Mexican States and the Russian Federation, the parties have determined that a new notification of the merger is required following the entry into the combination agreement amendment. The antitrust authorities of the United Mexican States have since granted their approval of the merger.

The consummation of the merger might be delayed due to the time required to fulfill the requests for information by the relevant regulatory authorities. In addition, in certain jurisdictions there may be unforeseen or other extensions of deadlines by the relevant antitrust authorities for the review of the merger. Such extensions are more likely to happen in the context of the current COVID-19 crisis. The terms and conditions of any antitrust approvals, consents and clearances that are ultimately granted may impose conditions, terms, obligations or restrictions on the conduct of Stellantis’s business.

FCA and PSA are obligated under the combination agreement to take all actions necessary to consummate the merger as soon as reasonably practicable, including the relevant competition approvals and to undertake and comply with such commitments as the regulatory authorities may require as a condition for such competition approvals. As an exception to the foregoing, neither FCA nor PSA is required to nor may, without the consent of the other party, undertake or comply with any commitments or take any action (i) if any such commitment or action, individually or in the aggregate, would, or would reasonably be expected to, result in a substantial detriment to the combined group or (ii) unless any such commitment or action is conditioned upon the consummation of the merger.

FCA and PSA currently operate, and up to the closing of the merger will continue to operate, independently as separate companies. The success of the merger will depend, in part, on Stellantis’s ability to realize the anticipated cost savings, synergies, growth opportunities and other benefits from combining the businesses. The achievement of the anticipated benefits of the merger is subject to a number of uncertainties, including general competitive factors in the marketplace and whether FCA and PSA are able to integrate their businesses in an efficient and effective manner and establish and implement effective operational principles and procedures. Failure to achieve these anticipated benefits could result in increased costs, decreases in the revenues of the combined group and diversion of management’s time and energy, and could materially impact Stellantis’s business, cash flows, financial condition or results of operations. If Stellantis is not able to successfully achieve these objectives, the anticipated cost savings, synergies, growth opportunities and other benefits that FCA and PSA expect to achieve as a result of the merger may not be realized fully, or at all, or may take longer than expected to realize.

The combined group will have to devote significant management attention and resources to integrating the business practices and operations of FCA and PSA. Potential difficulties that the combined group may encounter as part of the integration process include complexities associated with managing the business of the combined group, such as difficulty integrating manufacturing processes, systems and technology, in a seamless manner, as well as integration of the workforces of the two companies. In addition, the integration of FCA’s and PSA’s businesses may result in additional and unforeseen expenses, capital investments and financial risks, such as the incurrence of unexpected write-offs, the possible effect of adverse tax treatments and unanticipated or unknown liabilities relating to FCA, PSA or the merger. All of these factors could decrease or delay the expected accretive effect of the merger.

It is possible that the integration process could take longer or be more costly than anticipated or could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the ability of Stellantis to maintain relationships with suppliers, customers and employees, achieve the anticipated benefits of the merger or maintain quality standards. An inability to realize the full extent of, or any of, the anticipated benefits of the merger, as well as any delays encountered in the integration process, could have an adverse effect on Stellantis’s business, cash flows, financial condition or results of operations, which may affect the value of Stellantis common shares following the consummation of the merger.

Although FCA and PSA expect to complete the merger within 12-15 months from the date of the combination agreement, the obligation of each party to effect the merger is subject to various closing conditions, which are largely beyond FCA’s and PSA’s control and any of which may prevent, delay or otherwise materially adversely affect the consummation of the merger. The consummation of the merger is conditioned upon, among other conditions, (i) the approval of the merger by each of the FCA shareholders and PSA shareholders; (ii) the approval from the NYSE, Euronext Paris and the MTA for listing of the Stellantis common shares; (iii) the effectiveness of FCA’s registration statement on Form F-4; (iv) the receipt of the required approvals from antitrust authorities; (v) the receipt of any consents necessary to be obtained in order to consummate the merger; (vi) the receipt of clearance from the European Central Bank; and (vii) the absence of injunctions or restraints of any governmental entity that prohibit or make illegal the consummation of the merger, but only to the extent that any failure to comply with such prohibition would reasonably be expected to result in a substantial detriment to the combined group. FCA and PSA cannot provide any assurance as to when these conditions will be satisfied or waived, if at all, or that other events will not intervene to delay or result in the failure to complete the merger. Any delay in completing the merger could prevent or delay the combined group from realizing some or all of the anticipated cost savings, synergies, growth opportunities and other benefits that FCA and PSA expect to achieve if the merger is successfully completed within the expected time frame.

The market price of FCA common shares and PSA ordinary shares currently, and in the period prior to termination, if the combination agreement were to be terminated, may reflect a market assumption that the merger will occur. If the merger is not completed for any reason, including as a result of FCA and PSA shareholders failing to approve the merger, the business, cash flows, financial condition or results of operations of FCA and PSA may be materially adversely affected. Without realizing any of the anticipated benefits of completing the merger, FCA and PSA would be subject to a number of risks, including:

The pendency of the merger could cause disruptions in and create uncertainty surrounding FCA’s and PSA’s business, including with respect to FCA’s and PSA’s relationships with existing and future customers, suppliers and employees, which could have an adverse effect on FCA’s or PSA’s business, cash flows, financial condition or results of operations, irrespective of whether the merger is completed. The business relationships of FCA or PSA may be subject to disruption as customers, suppliers and other persons with whom FCA or PSA have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships or consider entering into business relationships with other parties. The risk, and adverse effect, of any such disruptions could be exacerbated by a delay in the consummation of the merger.

FCA and PSA have incurred, and expect to continue to incur, significant costs in connection with the merger, including the fees of their respective professional advisors. FCA and PSA may also incur unanticipated costs associated with the transaction, the listings on the NYSE, Euronext Paris and the MTA of the Stellantis common shares and the migration of Stellantis’s headquarters to the Netherlands as required in connection with the merger, and these unanticipated costs may have an adverse impact on the results of operations of Stellantis following the effectiveness of the merger. In addition, if the merger is consummated, the combined group will incur integration costs following the consummation of the merger. FCA and PSA cannot provide assurance that the realization of efficiencies related to the integration of the businesses of FCA and PSA will offset the incremental transaction and integration costs in the near term, if at all.

FCA and PSA depend on the experience and industry knowledge of their management personnel and other key employees to execute their respective business plans. Stellantis’s success after the consummation of the merger will also depend, in part, upon the ability of Stellantis to attract and retain management personnel and other key employees. Current employees of FCA and PSA may experience uncertainty about their roles within the combined group following the consummation of the merger, which may have an adverse effect on the ability of FCA and PSA to retain management and other key personnel.

Under the combination agreement, FCA and PSA are subject to certain restrictions on the conduct of their respective businesses and generally must operate in the ordinary course and consistent with past practice (subject to certain exceptions agreed between the parties in the combination agreement), which may restrict FCA’s and PSA’s ability to carry out certain of their respective business strategies. These restrictions may prevent FCA and PSA from pursuing otherwise attractive business opportunities, making certain investments or acquisitions, selling assets, engaging in capital expenditures in excess of certain agreed limits, incurring certain indebtedness or making changes to FCA’s and PSA’s respective businesses prior to the completion of the merger or termination of the combination agreement, as applicable. These restrictions could have an adverse effect on FCA’s and PSA’s respective businesses, cash flows, financial condition, results of operations or share price.

In the course of the due diligence review that each of FCA and PSA conducted prior to the execution of the combination agreement, FCA and PSA may not have discovered, or may have been unable to properly quantify, issues relating to the other party which may lead the combined group to write down or write off assets or incur impairment or other charges that could result in losses and such losses may be significant. In addition, even if the due diligence review conducted by each of FCA and PSA successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with each company’s preliminary risk analysis. The shareholders of FCA and PSA would not be compensated for any such losses.

FCA and PSA are a party to joint ventures, supply agreements, license agreements, financing and other agreements and instruments, some of which contain provisions that may be triggered by the merger, such as change of control provisions, default provisions, termination provisions, acceleration provisions and/or mandatory repurchase provisions. The counterparties to such agreements may request contractual modifications and/or financial compensation as a condition to granting a waiver or consent under those agreements, and FCA and PSA cannot provide assurance that such counterparties will not exercise their rights under the provisions included in such agreements that are triggered by the merger, including termination rights where available. If FCA or PSA is unable to obtain any necessary waiver or consent, the operation of such provisions may cause the loss of contractual rights and benefits, the termination of joint venture agreements, supply agreements, licensing agreements or may require the renegotiation of financing agreements and/or the payment of fees.

FCA common shares are currently traded on the NYSE and on MTA. PSA ordinary shares are currently listed on Euronext Paris. FCA will apply to list the Stellantis common shares on the NYSE and on MTA as required in connection with the merger. FCA will also apply for admission to listing and trading of the Stellantis common shares on Euronext Paris, subject to approval by the competent authorities. It is not possible to predict how trading will develop on these markets. The tripartite listing of Stellantis common shares may adversely affect the liquidity of the shares in one or several markets. In addition, the tripartite listing of Stellantis common shares may result in price differentials between the exchanges. Differences in the trading schedules, as well as volatility in the exchange rate of the trading currencies, among other factors, may result in different trading prices for Stellantis common shares on the three exchanges.

Following the merger, shareholders who hold Stellantis common shares for an uninterrupted period of at least three years may elect to receive one special voting share in addition to each Stellantis common share held, provided that such shares have been registered in the Loyalty Register upon application by the relevant holder. If Stellantis shareholders holding a significant number of Stellantis common shares for an uninterrupted period of at least three years elect to receive special voting shares, a relatively large proportion of the voting power of Stellantis could be concentrated in a relatively small number of shareholders who would have significant influence over Stellantis. As a result, the ability of other Stellantis shareholders to influence the decisions of Stellantis would be reduced.

Stellantis’s loyalty voting structure may make it more difficult for a third party to acquire, or attempt to acquire, control of Stellantis, even if a change of control were considered favorably by shareholders holding a majority of Stellantis common shares. As a result of the loyalty voting structure, a relatively large proportion of the voting power of Stellantis could be concentrated in a relatively small number of shareholders, which may make it more difficult for third parties to seek to acquire control of Stellantis by purchasing shares that do not benefit from the additional voting power of the special voting shares. The possibility or expectation of a change of control transaction typically leads to higher trading prices and conversely, if that possibility is low, trading prices may be lower. The loyalty voting structure may also prevent or discourage shareholders’ initiatives aimed at changing Stellantis’s management.

Public health crises such as pandemics or similar outbreaks could adversely impact the combined group’s business. On March 11, 2020, the COVID-19 outbreak was declared a global pandemic by the World Health Organization (“WHO”), leading to government-imposed quarantines, travel restrictions, “stay-at-home” orders and similar mandates for many individuals to substantially restrict daily activities and for businesses to curtail or cease normal operations. The impact of COVID-19, including changes in consumer behavior, pandemic fears and market downturns, as well as restrictions on business and individual activities, has led to a global economic slowdown and a significant decrease in demand in the global automotive market, which may persist even after certain restrictions related to the COVID-19 outbreak are lifted.

FCA and PSA took a number of steps as a result of the pandemic, in line with advice provided by the WHO and the public health measures imposed in the countries in which they operate. For example, FCA implemented a temporary suspension of production across its facilities: in APAC, starting with China on January 23, 2020; in EMEA, starting with Italy from March 11, 2020; in North America, phased in progressively from March 18, 2020; and in LATAM, on March 23, 2020. On February 19, 2020 and February 24, 2020, production restarted at FCA’s GAC Fiat Chrysler Automobiles Co. joint venture plants in Guangzhou and Changsha, China, respectively. On April 27, 2020, production restarted at FCA’s Sevel joint venture plant in Atessa, Italy. Production restarted in all North American plants by June 1, 2020; in India on May 18, 2020; and in Latin America by May 11, 2020. European production has resumed and a full restart is expected in the third quarter of 2020.

PSA also temporarily suspended operations at its facilities. After closing its production sites in China in mid-January 2020, PSA announced, beginning on March 16, 2020, the successive closure of its European production sites followed by the rest of the world. PSA’s production sites in China restarted operations in mid-March 2020, while production sites in Europe and the rest of the world gradually restarted operations beginning on May 4, 2020, with all production facilities having resumed operations by mid-August 2020.

As a result of the restrictions described above, and consumers’ reaction to the COVID-19 outbreak in general, showroom traffic at FCA’s and PSA’s dealers has dropped significantly and many dealers have temporarily ceased operations, thereby reducing the demand for FCA’s and PSA’s products and leading to dealers purchasing fewer vehicles, parts and accessories. In addition, the COVID-19 outbreak may cause significant disruptions of the supply chains of FCA, PSA and the combined group. These disruptions may negatively impact the availability and price at which FCA, PSA or the combined group are able to source components and raw materials globally, which could reduce the number of vehicles FCA, PSA or the combined group will be able to manufacture and sell. FCA, PSA or the combined group may not be able to pass on increases in the price of components and raw materials to their customers, which may adversely impact their results of operations. Furthermore, the COVID-19 pandemic may lead to financial distress for FCA’s, PSA’s or the combined group’s suppliers or dealers, as a result of which they may have to permanently discontinue or substantially reduce their operations. The pandemic may also lead to downward pressure on vehicle prices and contribute to an already challenging pricing environment in the automotive industry. In addition, the COVID-19 outbreak has led to higher working capital needs and reduced liquidity or limitations in the supply of credit, which may lead to higher costs of capital for FCA, PSA and the combined group. Lastly, COVID-19 has resulted in a sharp increase in unemployment rates compared to pre-COVID-19 levels. FCA and PSA expect that the economic uncertainty and higher unemployment may result in higher defaults in their consumer financing portfolio and prolonged unemployment may negatively impact demand for both new and used vehicles. These and other factors arising from the COVID-19 pandemic have had, and could continue to have, a material adverse impact on FCA’s, PSA’s or the combined group’s business, financial condition and results of operations.

FCA’s and PSA’s automotive operations generally realize minimal revenue while their respective plants are shut down, but they continue to incur expenses. The negative cash impact is exacerbated by the fact that, despite not producing vehicles, FCA and PSA have to continue to pay suppliers for components purchased earlier in a high volume environment. In addition, FCA and PSA deferred a significant number of capital expenditure programs, delayed or eliminated non-essential spending, and significantly reduced marketing expenses. These measures could have a material adverse effect on FCA’s and PSA’s ability to reach, and subsequently maintain, full production levels.

Further, even if restrictions on movement and business operations are eased, FCA, PSA or the combined group may still elect to continue the shutdown of some, or all, of its production sites and other facilities, either in the event of an outbreak of COVID-19 among their employees, or as a preventive measure to contain the spread of the virus and protect the health of their workforce and their respective communities. Such restrictions on movement and business operations may be reimposed by governments in response to a recurrence or “multiple waves” of the outbreak.

In addition, government-sponsored liquidity or stimulus programs in response to the COVID-19 pandemic may not be available to FCA’s and PSA’s customers, suppliers, dealers, or the combined group, and if available, the terms may be unattractive or may be insufficient to address the impact of COVID-19.

As is typical for automotive manufacturers, FCA and PSA have, and the combined group will have, significant fixed costs primarily due to their substantial investment in product development, property, plant and equipment and the requirements of collective bargaining agreements and other applicable labor relations regulations. As a result, changes in certain vehicle shipment volumes could have a disproportionately large effect on the combined group’s profitability. In particular, FCA’s profitability would be impacted in the event of lower volumes of pickup trucks and larger SUVs in North America, and PSA’s profitability would be impacted in the event of overall lower volumes in Europe.

FCA’s profitability in North America, a region which contributed a majority of FCA’s profit in each of the last three years, is particularly dependent on demand for pickup trucks and larger SUVs. FCA’s pickup trucks and larger SUVs have historically been more profitable than other FCA vehicles and accounted for approximately 71 percent of FCA’s total U.S. retail vehicle shipments in 2019. A shift in consumer demand away from these vehicles within the North America region, and towards compact and mid-size passenger cars, whether in response to higher fuel prices or other factors, could adversely affect the combined group’s profitability.

Moreover, the combined group is expected to operate with negative working capital as it will generally receive payment for vehicles within a few days of shipment, whereas there will be a lag between the time when parts and materials are received from suppliers and when the combined group pays for such parts and materials; therefore, in periods in which vehicle shipments decline materially, the combined group may suffer a significant negative impact on cash flow and liquidity as it continues to pay suppliers for components purchased in a high-volume environment during a period in which it will receive lower proceeds from vehicle shipments. If vehicle shipments decline, or if they were to fall short of the combined group’s assumptions, due to recessionary conditions, changes in consumer confidence, geopolitical events, inability to produce sufficient quantities of certain vehicles, enhanced competition in certain markets, loss of market share, limited access to financing or other factors, such decline or shortfall could have a material adverse effect on the combined group’s business, financial condition and results of operations.

With operations worldwide, the combined group’s business, financial condition and results of operations may be influenced by macroeconomic factors within the various countries in which it will operate, including changes in gross domestic product, the level of consumer and business confidence, changes in interest rates for or availability of consumer and business credit, the rate of unemployment, foreign currency controls and changes in exchange rates, as well as geopolitical risks, such as government instability, social unrest, the rise of nationalism and populism and disputes between sovereign states.

The combined group will have operations in a number of emerging markets, including Turkey, China, Brazil, Argentina, India and Russia. The combined group will be particularly susceptible to risks relating to local political conditions, import and/or export restrictions (including the imposition of tariffs on raw materials and components it will procure and on the vehicles it will sell), and compliance with local laws and regulations in these markets.

For example, in Brazil, FCA has historically received certain tax benefits and other government grants, which have favorably affected FCA’s results of operations. These tax benefits were recently extended through 2025. Expiration of these tax benefits and government grants without their renewal or any change in the amount of such tax benefits or government grants could have a material adverse effect on the combined group’s business, financial condition and results of operations.

On June 23, 2016, a majority of voters in a national referendum in the United Kingdom voted in favor of Brexit. The United Kingdom left the European Union on January 31, 2020 and, pursuant to a negotiated withdrawal agreement, there will be an 11-month transition period, ending on December 31, 2020, during which EU rules will continue to apply in the United Kingdom. During this period, the United Kingdom and the European Union will seek to reach an agreement on their future relationship. An agreement with regard to future trade and cooperation may not be reached prior to the end of the transition period. In addition, such an agreement may result in greater restrictions on imports and exports between the United Kingdom and the European Union (including tariffs of ten percent on vehicles and approximately 3.5 percent on spare parts if no trade agreement is reached), difficulties in the procurement of parts as a result of the reintroduction of customs formalities and additional regulatory complexity as well as further global economic uncertainty, all of which could have a material adverse effect on the combined group’s business, financial condition and results of operations. Furthermore, Brexit could lead to fluctuations in the exchange rate between the pound sterling and the euro, which could adversely impact the sale of vehicles the combined group imports into, or exports from, the United Kingdom. In 2019, PSA sold approximately 395,000 vehicles in the United Kingdom, which represented approximately 11.4 percent of total vehicles sold by PSA during that period.

In recent years, there has been a significant increase in activity and speculation regarding tariffs and other barriers to trade imposed between governments in various regions, in particular the United States and its trading partners, China and the European Union. For example, FCA manufactures a significant percentage of its vehicles outside the United States (particularly in Canada, Mexico and Italy) for import into the United States. FCA also manufactures vehicles in the United States that are exported to China. Tariffs or duties that would impact the combined group’s products could reduce consumer demand, make the combined group’s products less profitable or the cost of required raw materials more expensive or delay or limit the combined group’s access to these raw materials, each of which could have a material adverse effect on the combined group’s business, financial condition and results of operations. In addition, a continued escalation in tariff or duty activity between the United States and its major trading partners could negatively impact global economic activity, which could in turn reduce demand for the combined group’s products.

The combined group will focus on volume growth and margin expansion strategies, which include the renewal of key products, the launch of white-space products, the implementation of various electrified powertrain applications and partnerships relating to the development of autonomous driving technologies. FCA has experienced challenges in expanding the product range and global sales of certain brands, in particular, Alfa Romeo. As a result, FCA has rationalized its product plans, which resulted in the recognition of impairment charges in the third quarter of 2019. PSA has experienced challenges with respect to the visibility of its brands in China and Russia, which has led to reduced sales for PSA’s products in those markets. In addition, PSA may not be successful in positioning its DS brand as a premium brand in light of competition from established premium brands that benefit from favorable reputations and significant marketing budgets.

The combined group’s success will depend on, among other things, its ability to develop innovative, high-quality products that are attractive to consumers and provide adequate profitability.

The combined group may not be able to effectively compete with other automakers with regard to electrification, autonomous driving, mobility, artificial intelligence and other emerging trends in the industry. In addition, the combined group may fail to sufficiently adapt its business model to new forms of mobility, such as car-sharing, car-pooling and connected services. Such changes to mobility may also lead to a decrease in sales, as new forms of mobility gain market acceptance as alternatives to outright vehicle ownership by end users.

In certain cases, the technologies that the combined group plans to employ are not yet commercially practical and depend on significant future technological advances by the combined group, its partners and suppliers. These advances may not occur in a timely or feasible manner, the combined group may not obtain rights to use these technologies and the funds that the combined group will have budgeted or expended for these purposes may not be adequate. Further, the combined group’s competitors and others are pursuing similar and other competing technologies, and they may acquire and implement similar or superior technologies sooner than the combined group will or on an exclusive basis or at a significant cost advantage. Even where the combined group is able to develop competitive technologies, it may not be able to profit from such developments as anticipated. For example, the advent of electric and plug-in hybrid vehicles has fueled highly competitive pricing among automakers in order to win market share, which may significantly and adversely affect profits with respect to the sale of such vehicles. Furthermore, technological capabilities acquired through costly investment may prove short-lived, for example, if hybrid cars were replaced by fully electric cars sooner than expected. In addition, vehicle electrification may negatively affect after-sales revenues as electric vehicles are expected to require fewer repairs.

Further, as a result of the extended product development cycle and inherent difficulty in predicting consumer acceptance, a vehicle that is expected to be attractive may not generate sales in sufficient quantities and at high enough prices to be profitable. It takes several years to design and develop a new vehicle, and a number of factors may lengthen that schedule. For example, if the combined group determines that a safety or emissions defect, mechanical defect or non-compliance with regulation exists with respect to a vehicle model prior to retail launch, the launch of such vehicle could be delayed until the combined group remedies the defect or non-compliance. Various elements may also contribute to consumers’ acceptance of new vehicle designs, including competitors’ product introductions, fuel prices, general economic conditions and changes in consumer preferences. In addition, vehicles developed by the combined group in order to comply with government regulations, particularly those related to fuel efficiency, greenhouse gas and tailpipe emissions standards, may not be attractive to consumers or may not generate sales in sufficient quantities and at high enough prices to be profitable.

If the combined group fails to develop products that contain desirable technologies and are attractive to and accepted by consumers, the residual value of its vehicles could be negatively impacted. In addition, the increasing pace of inclusion of new innovations and technologies in the combined group’s and its competitors’ vehicles could also negatively impact the residual value of its vehicles. A deterioration in residual value could increase the cost that consumers pay to lease the combined group’s vehicles or increase the amount of subvention payments that the combined group makes to support its leasing programs.

The failure to develop and offer innovative, attractive and relevant products on a timely basis could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group’s success will largely depend on the ability of its senior executives and other members of management to effectively manage the combined group and individual areas of the business. The combined group’s management team will be critical to the execution of its direction and the implementation of its strategies. The combined group may not be able to replace these individuals with persons of equivalent experience and capabilities. Attracting and retaining qualified and experienced personnel in each of the combined group’s regions will be critical to its competitive position in the automotive industry. If the combined group is unable to find adequate replacements or to attract, retain and incentivize senior executives, other key employees or new qualified personnel, such inability could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group will take steps to improve efficiency in its manufacturing, supply chain and logistics processes. This includes planning production based on sales forecasts, and in particular producing certain vehicle models with specified features based on forecasted dealer and end customer orders, which is expected to allow the combined group to more efficiently and cost effectively manage its supply chain. This practice may result in higher finished goods inventory in certain periods when the combined group anticipates increased dealer and end customer orders. Further, while it is expected that the combined group’s analytical tools should enable it to align production with dealer and end customer orders, if such orders do not meet the combined group’s forecasts, its profitability on these vehicles may be affected.

The combined group’s dealers will enter into wholesale financing arrangements to purchase vehicles from it to hold in inventory and facilitate retail sales, and retail consumers use a variety of finance and lease programs to acquire vehicles. Unlike many of its competitors, the combined group will not own and operate a wholly-owned finance company dedicated solely to its mass-market vehicle operations in the United States and the majority of key markets in Europe, Asia and South America. The combined group will instead partner with specialized financial services providers through joint ventures and commercial agreements with third parties, including third party financial institutions, in order to provide financing to its dealers and retail consumers including in the United States and key markets in Europe, Asia and South America. The combined group’s reliance on partnerships in these key markets may increase the risk that its dealers and retail consumers will not have access to sufficient financing on acceptable terms, which may adversely affect its vehicle sales in the future.

Furthermore, many of the combined group’s prospective competitors are better able to implement financing programs designed to maximize vehicle sales in a manner that optimizes profitability for them and their finance companies on an aggregate basis. Since the combined group’s ability to compete will depend on access to appropriate sources of financing for dealers and retail consumers, its reliance on partnerships in those markets could have a material adverse effect on the combined group’s business, financial condition and results of operations.

Potential capital constraints may impair the financial services providers’ ability to provide competitive financing products to the combined group’s dealers and retail consumers. For example, any financial services provider, including the combined group’s joint ventures and controlled finance companies, will also face other demands on its capital, including the need or desire to satisfy funding requirements for dealers or consumers of the combined group’s competitors as well as liquidity issues relating to other investments. Furthermore, they may be subject to regulatory changes that may increase their cost of capital or capital requirements.

To the extent that a financial services provider is unable or unwilling to provide sufficient financing at competitive rates to the combined group’s dealers and retail consumers, such dealers and retail consumers may not have sufficient access to financing to purchase or lease vehicles. As a result, the combined group’s vehicle sales and market share may suffer, which could have a material adverse effect on its business, financial condition and results of operations.

The combined group will be exposed to risks inherent in certain new methods of distribution, including the digitalization of points of sale and, more broadly, the transformation of its sales network in order to respond to developing trends in the automotive industry such as consumers’ shift towards online sales. Delays in the digital transformation of distribution methods, both at points of sale and in sales networks, as well as increased costs, whether as a result of the transformation of the combined group’s sales network or new distribution methods, could impact the combined group’s ability to effectively compete with other automakers. In addition, the combined group’s employees may lack the necessary skills or training to implement or utilize such new distribution methods. If there is a delay or failure to implement new distribution methods or such transitions are not successful, there may be a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group’s vehicles, as well as vehicles manufactured by other original equipment manufacturers (“OEMs”), will contain complex systems that control various vehicle processes including engine, transmission, safety, steering, brakes, window and door lock functions. These electronic control systems, which are increasingly connected to external cloud-based systems, are susceptible to cybercrime, including threats of intentional disruptions, loss of control over the vehicle, loss of functionality or services and theft of personal information. These disruptions are likely to increase in terms of sophistication and frequency as the level of connectivity and autonomy in the combined group’s vehicles increases. In addition, the combined group may have to rely on third parties for connectivity and automation technology and services, including for the collection of its customers’ data. These third parties could unlawfully resell or otherwise misuse such information, or suffer data breaches. A significant malfunction, disruption or security breach compromising the electronic control systems contained in the combined group’s vehicles could damage its reputation, expose it to significant liability and could have a material adverse effect on its business, financial condition and results of operations.

The combined group’s ability to keep its business operating effectively will depend on the functional and efficient operation of its information, data processing and telecommunications systems, including its vehicle design, manufacturing, inventory tracking and billing and payment systems, as well as other central information systems and applications, employee workstations and other IT equipment. In addition, the combined group’s vehicles will be increasingly connected to external cloud-based systems while its industrial facilities will become more computerized. The combined group’s systems, and in particular those of the combined group’s financing activities and joint venture partners following the digitalization of their operations, will be susceptible to cybercrime and will regularly be the target of threats from third parties, which could result in data theft, loss of control of data processed in an external cloud, compromised IT networks and stoppages in operations. A significant or large-scale malfunction or interruption of any one of the combined group’s computer or data processing systems, including through the exploitation of a weakness in its systems or the systems of the combined group’s suppliers or service providers, could have a material adverse effect on its ability to manage and keep its manufacturing and other operations running effectively, and may damage its reputation. A malfunction or security breach that results in a wide or sustained disruption to the combined group’s business could have a material adverse effect on its business, financial condition and results of operations.

In addition to supporting its operations, the combined group’s systems will collect and store confidential and sensitive data, including information about its business, consumers and employees. As technology continues to evolve, it is expected that the combined group will collect and store even more data in the future and that its systems will increasingly use remote communication features that are sensitive to both willful and unintentional security breaches. Much of the combined group’s value will be derived from its confidential business information, including vehicle design, proprietary technology and trade secrets, and to the extent the confidentiality of such information is compromised, the combined group may lose its competitive advantage and its vehicle shipments may suffer. The combined group will also collect, retain and use personal information, including data gathered from consumers for product development and marketing purposes, and data obtained from employees. In the event of a breach in security that allows third parties access to this personal information, the combined group will be subject to a variety of ever-changing laws on a global basis that could require it to provide notification to the data owners and subject it to lawsuits, fines and other means of regulatory enforcement.

For example, the General Data Protection Regulation (Regulation (EU) 2016/679) (the “GDPR”) has increased the stringency of European Union data protection requirements and related penalties. Non-compliance with the GDPR can result in fines of the higher of €20 million or four percent of annual worldwide revenue. GDPR has required changes to FCA’s and PSA’s existing business practices and systems in order to ensure compliance and address concerns of customers and business partners. In addition, the California Consumer Privacy Act of 2018 became effective on January 1, 2020 and provides California residents with new data privacy rights. Several other U.S. states are also considering adopting laws and regulations imposing obligations regarding the handling of personal data. Complying with any new data protection-related regulatory requirements could force the combined group to incur substantial expenses or require it to change its business practices in a manner that has a material adverse effect on its business, financial condition and results of operations.

The combined group’s reputation could also suffer in the event of a data breach, which could cause consumers to purchase their vehicles from its competitors. Ultimately, any significant compromise in the integrity of its data security could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group will operate, or is expected to expand its presence, in emerging markets, such as China and India, through partnerships and joint ventures. For instance, FCA operates the GAC FCA joint venture with Guangzhou Automobiles Group Co., Ltd., which locally produces the Jeep Cherokee, Jeep Renegade, Jeep Compass, Jeep Grand Commander and Jeep Commander PHEV (plug-in hybrid electric vehicle) primarily for the Chinese market, expanding the portfolio of Jeep SUVs currently available to Chinese consumers. FCA also has a joint operation with TATA Motors Limited for the production of certain of its vehicles, engines and transmissions in India. Similarly, PSA operates a joint venture in China with Dongfeng Motor Group, namely Dongfeng Peugeot Citroën Automobile (“DPCA”), which manufactures vehicles under the Dongfeng Peugeot and Dongfeng Citroën brands in China, and Dongfeng Peugeot Citroën Automobile Sales Co (“DPCS”), which markets the vehicles produced by DPCA in China.

Although sales of FCA and PSA in the markets where these arrangements exist are currently limited, the ability of the combined group to grow in this market is important to its strategy and any issues with these arrangements may adversely affect those growth prospects. The combined group’s reliance on joint arrangements to enter or expand its presence in emerging markets may expose it to the risk of conflict with its joint arrangement partners and the need to divert management resources to oversee these arrangements. Further, as these arrangements require cooperation with third party partners, these joint arrangements may not be able to make decisions as quickly as the combined group would if it were operating on its own or may take actions that are different from what the combined group would do on a standalone basis in light of the need to consider its partners’ interests. As a result, the combined group may be less able to respond timely to changes in market dynamics, which could have a material adverse effect on its business, financial condition and results of operations.

Substantially all of the combined group’s revenues will be generated in the automotive industry, which is highly competitive and cyclical, encompassing the production and distribution of passenger cars, light commercial vehicles and components and systems. The combined group will face competition from other international passenger car and light commercial vehicle manufacturers and distributors and components suppliers in Europe, North America, Latin America, the Middle East, Africa and the Asia Pacific region. These markets are all highly competitive in terms of product quality, innovation, the introduction of new technologies, response to new regulatory requirements, pricing, fuel economy, reliability, safety, consumer service and financial services offered. Some of the combined group’s competitors will also be better capitalized than the combined group and command larger market shares, which may enable them to compete more effectively in these markets. In addition, the combined group will be exposed to the risk of new entrants in the automotive market, which may have technological, marketing and other capabilities, or financial resources, that are superior to those of the combined group and of other traditional automobile manufacturers and may disrupt the industry in a way that is detrimental to the combined group. For example, the combined group will face increased competition from new local market entrants in China, against the backdrop of a softening economy that led to a significant decline in vehicle sales in this market in 2019.

If the combined group’s competitors are able to successfully integrate with one another and the combined group is not able to adapt effectively to increased competition, its competitors’ integration could have a material adverse effect on the combined group’s business, financial condition and results of operations.

In the automotive business, sales to consumers and fleet customers are cyclical and subject to changes in the general condition of the economy, the readiness of consumers and fleet customers to buy and their ability to obtain financing, as well as the possible introduction of measures by governments to stimulate demand, particularly related to new technologies (for example, technologies related to compliance with evolving emissions regulations). The automotive industry is characterized by the constant renewal of product offerings through frequent launches of new models and the incorporation of new technologies in those models. A negative trend in the automotive industry or the combined group’s inability to adapt effectively to external market conditions, coupled with more limited capital than its principal competitors, could have a material adverse effect on the combined group’s business, financial condition and results of operations.

In certain regions, including Europe and North America, financing for new vehicle sales has been available at relatively low interest rates for several years due to, among other things, expansive government monetary policies. If interest rates rise, market rates for new vehicle financing will generally be expected to rise as well, which may make the combined group’s vehicles less affordable to retail consumers or steer consumers to less expensive vehicles that would be less profitable for the combined group, adversely affecting its financial condition and results of operations. Additionally, if consumer interest rates increase substantially or if financial service providers tighten lending standards or restrict their lending to certain classes of credit, consumers may not desire or be able to obtain financing to purchase or lease the combined group’s vehicles. Furthermore, because purchasers of the combined group’s vehicles may be relatively more sensitive to changes in the availability and adequacy of financing and macroeconomic conditions, its vehicle sales may be disproportionately affected by changes in financing conditions relative to the vehicle sales of its competitors. As a result, a substantial increase in consumer interest rates or tightening of lending standards could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group will use a variety of raw materials in its business, including steel, aluminum, lead, polymers, elastomers, resin and copper, and precious metals such as platinum, palladium and rhodium, as well as electricity and natural gas. Also, as the combined group begins to implement various electrified powertrain applications throughout its portfolio, it will also depend on a significant supply of lithium, nickel and cobalt, which are used in lithium-ion batteries. The prices for these raw materials fluctuate, and market conditions can affect the combined group’s ability to manage its costs. Increased market power of raw material suppliers may contribute to such prices increasing. Additionally, as production of electric vehicles increases, the combined group may face shortages of raw materials and lithium cells and be forced to pay higher prices to obtain them. The combined group may not be successful in managing its exposure to these risks. Substantial increases in the prices for raw materials would increase the combined group’s operating costs and could reduce profitability if the increased costs cannot be offset by higher vehicle prices or productivity gains. In particular, certain raw materials are sourced from a limited number of suppliers and from a limited number of countries, particularly those needed in catalytic converters and lithium-ion batteries. From time to time these may be susceptible to supply shortages or disruptions. It is not possible to guarantee that the combined group will be able to maintain arrangements with suppliers that assure access to these raw materials at reasonable prices. In addition, the combined group’s industrial efficiency will depend in part on the optimization of the raw materials and components used in the manufacturing processes. If the combined group fails to optimize these processes, it may face increased production costs.

The combined group will also be exposed to the risk of price fluctuations and supply disruptions and shortages, including due to supplier disputes, particularly with regard to warranty recovery claims, supplier financial distress, tight credit markets, trade restrictions, tariffs, natural or man-made disasters, epidemics or pandemics of diseases, or production difficulties. Fluctuations in the price of parts and components can adversely affect the combined group’s costs and profitability, and any such effect may be material. Further, trade restrictions and tariffs may be imposed, leading to increases in the cost of raw materials and delayed or limited access to purchases of raw materials, each of which could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group’s production facilities will be subject to risks related to natural disasters, such as earthquakes, fires, floods, hurricanes, other climatic phenomena, environmental disasters and other events beyond the combined group’s control, such as power loss and uncertainties arising out of armed conflicts or terrorist attacks.

Any catastrophic loss or significant damage to any of the combined group’s facilities would likely disrupt its operations, delay production, and adversely affect its product development schedules, shipments and revenue. For example, in 2011, the earthquake off the coast of Fukushima in Japan disrupted part of PSA’s diesel engine production due to a supply shortage at one of its Japanese suppliers.

The occurrence of a major incident at a single manufacturing site could compromise the production and sale of several hundred thousand vehicles. In addition, any such catastrophic loss or significant damage could result in significant expense to repair or replace the facility and could significantly curtail the combined group’s research and development efforts in the affected area, which could have a material adverse consequence on the combined group’s business, financial condition and results of operations.

The combined group will operate in numerous markets worldwide and be exposed to risks stemming from fluctuations in currency and interest rates. The exposure to currency risk will be mainly linked to differences in the geographic distribution of the combined group’s manufacturing and commercial activities, resulting in cash flows from sales being denominated in currencies different from those of purchases or production activities. Additionally, a significant portion of the combined group’s operating cash flow will be generated in U.S. Dollars and, although a portion of its debt will be denominated in U.S. Dollars, the majority of its indebtedness will be denominated in Euro.

The combined group will use various forms of financing to cover funding requirements for its activities. Moreover, liquidity for industrial activities will also be principally invested in variable and fixed rate or short-term financial instruments. FCA’s financial services businesses normally operate a matching policy to offset the impact of differences in rates of interest on the financed portfolio and related liabilities. Banque PSA Finance also operates a matching policy by using appropriate financial instruments to match interest rates on its loans and related liabilities. Nevertheless, changes in interest rates can affect the combined group’s net revenues, finance costs and margins.

In addition, although the combined group will manage risks associated with fluctuations in currency and interest rates through financial hedging instruments, fluctuations in currency or interest rates could have a material adverse effect on its business, financial condition and results of operations.

The combined group’s financial services activities will also be subject to the risk of insolvency of dealers and retail consumers. Despite the combined group’s efforts to mitigate such risks through the credit approval policies applied to dealers and retail consumers, it may not be able to successfully mitigate such risks.

As the combined group seeks to comply with government regulations, particularly those related to fuel efficiency, vehicle safety and greenhouse gas and tailpipe emissions standards, it will have to devote significant financial and management resources, as well as vehicle engineering and design attention, to these legal requirements. Greenhouse gas emissions standards will also apply to the combined group’s production facilities in several jurisdictions in which it will operate, which may require investments to upgrade facilities and increase operating costs. In addition, a failure to decrease the energy consumption of plants may lead to penalties, each of which may adversely affect the combined group’s profitability. In addition, the European Union’s Green Deal could result in changes to laws and regulations, including requiring, or incentivizing, financial institutions to reduce lending to industries responsible for significant greenhouse gas emissions, which could result in an increase in the cost of European financings for the combined group.

The combined group’s production facilities will also be subject to a broad range of additional requirements governing environmental, health and safety matters, including those relating to registration, use, storage and disposal of hazardous materials and discharges to water and air (including emissions of sulphur oxide, nitrogen oxide, volatile organic compounds and other pollutants). A failure by the combined group to comply with such requirements, or additional requirements imposed in the future, may result in substantial penalties, claims and liabilities which could have a material adverse effect on its business, financial condition and results of operations. The combined group could also incur substantial cleanup costs and third-party claims as a result of environmental impacts that may be associated with its current or former properties or operations.

On August 31, 2020, the U.S. Court of Appeals for the Second Circuit vacated a final rule published by the National Highway Safety Administration (“NHTSA”) in July 2019 that had reversed NHTSA’s 2016 increase to the base rate of the CAFE penalty from $5.50 to $14.00. The base rate applies to each tenth of a mile per gallon (“MPG”) that a manufacturer’s fleet-wide average MPG is below the CAFE standard, and is multiplied by the number of vehicles in the manufacturer’s fleet to arrive at an aggregate penalty. FCA has accrued estimated amounts for any probable CAFE penalty based on the $5.50 rate. The possible effect of the August 31, 2020 ruling is not yet clear, as it is not yet effective because the mandate has not yet been issued. In addition, NHTSA filed a petition for rehearing with the court of appeals which was subsequently denied on November 2, 2020. It is not clear whether NHTSA will appeal the ruling to the U.S. Supreme Court or whether an injunction will be requested or granted. It is also uncertain if the ruling will only apply prospectively or if NHTSA or the plaintiffs will seek to apply the $14.00 rate retrospectively to the 2019 Model Year notwithstanding that automakers including FCA relied on the July 2019 rulemaking. FCA or industry representatives could challenge any retrospective application of the reinstated 2016 regulations. If the higher rate were applied retrospectively to the 2019 Model Year, FCA may need to accrue additional amounts due to increased CAFE penalties and additional amounts owed under certain agreements for the purchase of regulatory emissions credits. The amounts accrued could be up to €500 million depending on, among other things, FCA’s ability to implement future product actions or other actions to modify the utilization of credits.

Most of the combined group’s suppliers will face similar environmental requirements and constraints. A failure by the combined group’s suppliers to meet applicable environmental laws or regulations may lead to a disruption of the combined group’s supply chain or an increase in the cost of raw materials and components used in production and could have a material adverse effect on its business, financial condition and results of operations.

On January 10, 2019, FCA announced that FCA US reached final settlements on civil environmental and consumer claims with the U.S. Environmental Protection Agency (“EPA”), U.S. Department of Justice, the California Air Resources Board, the State of California, 49 other States and U.S. Customs and Border Protection, for which €748 million was accrued during the year ended December 31, 2018. Approximately €350 million of the accrual was related to civil penalties to resolve differences over diesel emissions requirements. A portion of the accrual was attributable to settlement of a putative class action on behalf of consumers in connection with which FCA US agreed to pay an average $2,800 per vehicle for eligible customers affected by the recall. FCA continues to defend individual claims from approximately 3,200 consumers that have exercised their right to opt out of the class action settlement and pursue their own individual claims against FCA (the “Opt-Out Litigation”). FCA has engaged in further discovery in the Opt-Out Litigation and participated in court-sponsored settlement conferences, but has reached settlement agreements with less than 100 of these remaining plaintiffs.

In the United States, FCA remains subject to a diesel emissions-related investigation by the U.S. Department of Justice, Criminal Division. In September 2019, the U.S. Department of Justice filed criminal charges against an employee of FCA US for, among other things, fraud, conspiracy, false statements and violations of the Clean Air Act primarily in connection with efforts to obtain regulatory approval of the vehicles that were the subject of the civil settlements described above. FCA has continued discussions with the U.S. Department of Justice, Criminal Division to determine whether it can reach an appropriate resolution of the investigation as it relates to FCA, which may involve the payment of penalties and other non-financial sanctions. FCA also remains subject to a number of related private lawsuits. In September 2020, FCA settled the diesel emissions-related investigation with the U.S. Securities and Exchange Commission for an amount that is not material to FCA.

FCA has also received inquiries from other regulatory authorities in a number of jurisdictions as they examine the on-road tailpipe emissions of several automakers’ vehicles and, when jurisdictionally appropriate, FCA will continue to cooperate with these governmental agencies and authorities.

In Europe, FCA is working with the Italian Ministry of Transport (“MIT”) and the Dutch Vehicle Regulator (“RDW”), the authorities that certified FCA diesel vehicles for sale in the European Union, and the U.K. Driver and Vehicle Standards Agency in connection with their review of several of its vehicles.

FCA also initially responded to inquiries from the German authority, the Kraftfahrt-Bundesamt (“KBA”), regarding emissions test results for its vehicles, and it discussed the KBA-reported test results, its emission control calibrations and the features of the vehicles in question. After these initial discussions, the MIT, which has sole authority for regulatory compliance of the vehicles it has certified, asserted its exclusive jurisdiction over the matters raised by the KBA, tested the vehicles, determined that the vehicles complied with applicable European regulations and informed the KBA of its determination. Thereafter, mediations have been held under European Commission (“EC”) rules, between the MIT and the German Ministry of Transport and Digital Infrastructure, which oversees the KBA, in an effort to resolve their differences. The mediation was concluded with no action being taken with respect to FCA. In May 2017, the EC announced its intention to open an infringement procedure against Italy regarding Italy’s alleged failure to respond to the EC’s concerns regarding certain FCA emission control calibrations. The MIT has responded to the EC’s allegations by confirming that the vehicles’ approval process was properly performed.

In December 2019, the MIT notified FCA that the Dutch Ministry of Infrastructure and Water Management (“I&W”) had been communicating with the MIT regarding certain irregularities allegedly found by the RDW and the Dutch Center of Research TNO in the emission levels of certain Jeep Grand Cherokee Euro 5 models and a vehicle model of another OEM that contains a Euro 6 diesel engine supplied by FCA. In January 2020, the Dutch Parliament published a letter from the I&W summarizing the conclusions of the RDW regarding those vehicles and engines and indicating an intention to order a recall and report their findings to the public prosecutor, the EC and other Member States. FCA has engaged with the RDW to present its positions and cooperate to reach an appropriate resolution of this matter. FCA has proposed certain updates to the relevant vehicles that have been tested and approved by the RDW and are now being implemented. In addition, at the request of the French Consumer Protection Agency, the Juge d’Instruction du Tribunal de Grande Instance of Paris is investigating diesel vehicles of a number of automakers including FCA, regarding whether the sale of those vehicles violated French consumer protection laws. In July 2020, unannounced inspections took place at several FCA sites in Germany, Italy and the UK at the initiative of the public prosecutors of Frankfurt am Main and of Turin, as part of their investigations of potential violations of diesel emissions regulations and consumer protection laws. FCA is cooperating with the investigations. Several FCA companies and FCA’s Dutch dealers were recently served with a purported class action filed in the Netherlands by a Dutch foundation seeking monetary damages and vehicle buybacks in connection with alleged emissions non-compliance of certain FCA E5 and E6 diesel vehicles.

In December 2018, the Korean Ministry of Environment (“MOE”) announced its determination that approximately 2,400 FCA vehicles imported into Korea during 2015, 2016 and 2017 were not emissions compliant and that the vehicles with a subsequent update of the emission control calibrations voluntarily performed by FCA, although compliant, would have required re-homologation of the vehicles concerned. In May 2019, the MOE revoked certification of the above-referenced vehicles and announced an administrative fine for an amount not material to FCA. FCA has appealed the MOE’s decision. FCA’s subsidiary in Seoul, Korea is also cooperating with local criminal authorities in connection with their review of this matter, with the Korean Fair Trade Commission regarding a purported breach of the Act on Fair Labeling and Advertisement in connection with the subject vehicles and with the MOE in connection with their review of other FCA vehicles.

In April 2016, the French Directorate General for Competition, Consumer Affairs and Fraud Control (“DGCCRF”) initiated an investigation regarding emissions from diesel engines, including engines used in PSA vehicles. In February 2017, the French Ministry of Economy issued a press release announcing that the DGCCRF referred the case to the prosecutor’s office of Versailles. None of PSA or its employees have been charged with any criminal offence. PSA continues to cooperate with the relevant French judicial authorities and present PSA’s position on any concerns raised during this investigation.

PSA is performing recalls of 95,781 Opel vehicles built by Adam Opel GmbH between 2013 and 2016 to update the emissions control system software. After Opel initiated voluntary field campaigns on these vehicles, as agreed with the KBA, the KBA ordered in 2018 that these campaigns be changed into mandatory recalls to update all outstanding vehicles. More than 75 percent of the vehicles have so far received the software update, and specifically in Germany, more than 95 percent. Opel Automobile GmbH also faces a number of related private lawsuits (not class actions) and a related investigation by the Frankfurt public prosecutor in Germany.

The results of the unresolved governmental inquiries and private litigation cannot be predicted at this time and these inquiries and litigation may lead to further enforcement actions, penalties or damage awards, any of which may have a material adverse effect on the combined group’s business, financial condition and results of operations. It is also possible that these matters and their ultimate resolution may adversely affect the combined group’s reputation with consumers, which may negatively impact demand for its vehicles and consequently could have a material adverse effect on its business, financial condition and results of operations.

For example, in November 2019, General Motors LLC and General Motors Company (collectively, “GM”) filed a lawsuit in the U.S. District Court for the Eastern District of Michigan against FCA US, FCA NV and certain individuals, claiming violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, unfair competition and civil conspiracy in connection with allegations that FCA US paid bribes to UAW officials that corrupted the bargaining process with the UAW and as a result FCA US enjoyed unfair labor costs and operational advantages that caused harm to GM. GM also claimed that FCA US had made concessions to the UAW in collective bargaining that the UAW was then able to extract from GM through pattern bargaining which increased costs to GM in an effort to force a merger between GM and FCA NV. The court dismissed the lawsuit with prejudice on July 8, 2020 on the basis that the alleged conduct did not constitute a violation of RICO. On August 3, 2020, GM filed a motion requesting that the court amend or alter its judgment, which the court denied. On August 17, 2020, GM provided notice of appeal to the U.S. Court of Appeals for the Sixth Circuit. GM has also filed an action against FCA in Michigan state court, making substantially the same claims as it made in the federal litigation.

In addition, FCA and other Brazilian taxpayers have significant disputes with the Brazilian tax authorities regarding the application of Brazilian tax law. FCA believes that it is more likely than not that there will be no significant impact from these disputes. However, given the current economic conditions and uncertainty in Brazil, new tax laws or more significant changes such as tax reform may be introduced and enacted. Changes to the application of existing tax laws may also occur or the realization of accumulated tax benefits may be limited, delayed or denied. Any of these events could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group’s performance will be, in part, dependent on complying with quality and safety standards, meeting customer expectations and maintaining the combined group’s reputation for designing, building and selling safe, high-quality vehicles. Given the global nature of the combined group’s business, these standards and expectations may vary according to the markets in which it will operate. For example, vehicle safety standards imposed by regulations are increasingly stringent. In addition, consumers’ focus on vehicle safety may increase further with the advent of autonomous and connected cars. If the combined group fails to meet or adhere to required vehicle safety standards, it may face penalties, become subject to other claims or liabilities or be required to recall vehicles.

The automotive industry in general has experienced a sustained increase in recall activity to address performance, compliance or safety-related issues. For example, in November 2019, FCA voluntarily recalled more than 700,000 SUVs worldwide due to problems with an electrical connection that could result in a vehicle stall. FCA’s costs related to vehicle recalls have been significant and typically include the cost of replacement parts and labor to remove and replace parts. The combined group’s costs related to vehicle recalls could increase in the future.

Recall costs substantially depend on the nature of the remedy and the number of vehicles affected and may arise many years after a vehicle’s sale. Product recalls may also harm the combined group’s reputation, force it to halt the sale of certain vehicles and cause consumers to question the safety or reliability of its products. Given the intense regulatory activity across the automotive industry, ongoing compliance costs are expected to remain high. Any costs incurred, or lost vehicle sales, resulting from product recalls could materially adversely affect the combined group’s financial condition and results of operations. Moreover, if the combined group faces consumer complaints, or receives information from vehicle rating services that calls into question the safety or reliability of one of its vehicles and the combined group does not issue a recall, or if it does not do so on a timely basis, its reputation may also be harmed and it may lose future vehicle sales. The combined group will also be obligated under the terms of its warranty agreements to make repairs or replace parts in its vehicles at its expense for a specified period of time. These factors, including any failure rate that exceeds the combined group’s assumptions, could have a material adverse effect on its business, financial condition and results of operations.

The combined group will be subject to laws and regulations relating to corruption and bribery, including those of the United States, the United Kingdom and France, which have an international reach and which will cover the entirety of the combined group’s value chain in all countries in which it will operate. The combined group will continue to have significant interactions with governments and governmental agencies in the areas of licensing, permits, regulatory, compliance and environmental matters among others. A failure by the combined group to comply with laws and regulations relating to corruption and bribery may lead to significant penalties and enforcement actions and could also have a long-term impact on the combined group’s presence in one, or more, of the markets in which such compliance failures have occurred.

In addition, customers of the combined group may have expectations relating to the production conditions and origin of the products they will purchase. Therefore, it will be important for the combined group to demonstrate transparency across the entire supply chain, which may result in additional costs being incurred. A failure by the combined group, or any of its suppliers or subcontractors, to comply with employment or other production standards and expectations may result in adverse consequences to the combined group’s reputation, disruptions to its supply chain and increased costs as a result of remedial measures needing to be undertaken to meet stakeholder expectations, which could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The combined group’s success will depend, in part, on its ability to protect its intellectual property rights. If the combined group fails to protect its intellectual property rights, others may be able to compete against the combined group using intellectual property that is the same as or similar to its own. In addition, there can be no guarantee that the combined group’s intellectual property rights will be sufficient to provide it with a competitive advantage against others who offer products similar to its products. For example, another OEM has been producing a vehicle closely resembling one of FCA’s Jeep models for sale in the United States. FCA has brought proceedings to stop these practices and, while initial rulings have been in FCA’s favor, FCA cannot be certain of the final outcome. More generally, despite the combined group’s efforts, it may be unable to prevent third parties from infringing its intellectual property and using its technology for their competitive advantage. Any such infringement could have a material adverse effect on the combined group’s business, financial condition and results of operations.

The laws of some countries in which the combined group will operate do not offer the same protection of intellectual property rights as do the laws of the United States or Europe. In addition, effective intellectual property enforcement may be unavailable or limited in certain countries, making it difficult for the combined group to protect its intellectual property from misuse or infringement there. The combined group’s inability to protect its intellectual property rights in some countries could have a material adverse effect on its business, financial condition and results of operations.

The combined group will be incorporated under the laws of the Netherlands, and a substantial portion of its assets will be outside of the United States. Most of its directors and senior management and its independent auditors will be resident outside the United States, and all or a substantial portion of their respective assets may be located outside the United States. As a result, it may be difficult for U.S. investors to effect service of process within the United States upon these persons. It may also be difficult for U.S. investors to enforce within the United States judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts outside the United States would recognize or enforce judgments of U.S. courts obtained against the combined group or its directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Therefore, it may be difficult to enforce U.S. judgments against the combined group, its directors and officers and its independent auditors.

The combined group will employ a significant number of people who are exposed to health and safety risks as a result of their employment. Working conditions can cause stress or discomfort that can impact employees’ health and may result in adverse consequences for the combined group’s productivity. In addition, as an automotive manufacturer, a significant number of the combined group’s employees will be shift workers in production facilities, involving physical demands which may lead to occupational injury or illness. The use or presence of certain chemicals in production processes may adversely affect the health of the combined group’s employees or create a safety risk. As a result, the combined group could be exposed to liability from claims brought by current or former employees and the combined group’s reputation, productivity, business, financial condition and results of operations may be affected.

The combined group’s stakeholders are expected to place increased emphasis on the importance of diversity, inclusion and equal opportunity in the workplace, against a backdrop of developing legal requirements in these areas. The combined group may suffer adverse effects on its reputation if it fails to meet its stakeholders’ expectations, which could result in an adverse effect on its business, financial condition and results of operations.

The combined group’s performance will depend on, among other things, its ability to finance debt repayment obligations and planned investments from operating cash flow, available liquidity, the renewal or refinancing of existing bank loans and/or facilities and possible access to capital markets or other sources of financing. The combined group’s indebtedness may have important consequences on the combined group’s operations and financial results, including:

The combined group could, therefore, find itself in the position of having to seek additional financing or having to refinance existing debt, including in unfavorable market conditions, with limited availability of funding and a general increase in funding costs. Any limitations on the combined group’s liquidity, due to a decrease in vehicle shipments, the amount of, or restrictions in, its existing indebtedness, conditions in the credit markets, general economic conditions or otherwise, may adversely impact its ability to execute its business strategies and impair its financial condition and results of operations. In addition, any actual or perceived limitations of the combined group’s liquidity may limit the ability or willingness of counterparties, including dealers, consumers, suppliers, lenders and financial service providers, to do business with the combined group, which could have a material adverse effect on its business, financial condition and results of operations.

Certain of FCA’s defined benefit pension plans are currently underfunded. For example, as of December 31, 2019, FCA’s defined benefit pension plans were underfunded by approximately €4.3 billion and may be subject to significant minimum contributions in future years. The combined group’s pension funding obligations may increase significantly if the investment performance of plan assets does not keep pace with benefit payment obligations. Mandatory funding obligations may increase because of lower than anticipated returns on plan assets, whether as a result of overall weak market performance or particular investment decisions, changes in the level of interest rates used to determine required funding levels, changes in the level of benefits provided for by the plans, or any changes in applicable law related to funding requirements. FCA’s defined benefit plans currently hold significant investments in equity and fixed income securities, as well as investments in less liquid instruments such as private equity, real estate and certain hedge funds. The external funds covering PSA’s pension obligations are invested in equity and fixed income securities. Due to the complexity and magnitude of certain investments, additional risks may exist, including the effects of significant changes in investment policy, insufficient market capacity to complete a particular investment strategy and an inherent divergence in objectives between the ability to manage risk in the short term and the ability to quickly re-balance illiquid and long-term investments.

Any reduction in the discount rate or the value of plan assets, or any increase in the present value of obligations, may increase the combined group’s pension expenses and required contributions and, as a result, could constrain liquidity and materially adversely affect its financial condition and results of operations. If FCA, and after the closing, the combined group fails to make required minimum funding contributions to FCA’s U.S. pension plans, it could be subject to reportable event disclosure to the U.S. Pension Benefit Guaranty Corporation, as well as interest and excise taxes calculated based upon the amount of any funding deficiency.

Several tax ruling requests have been filed with the French tax authorities regarding certain tax consequences of the merger, which have not been granted yet.

Such tax regimes and tax rulings are subject to certain conditions being met and may be based on certain declarations, representations and undertakings of PSA and FCA towards the French tax authorities.

If the French tax authorities consider that the applicable conditions are not fulfilled, the French tax authorities could deny the benefit of such regimes and therefore refuse to grant the requested tax rulings. They could also revoke in the future the rulings that have been granted if the relevant declarations, representations and undertakings, as the case may be, were not correct or complied with.

Since Stellantis is incorporated under Dutch law, it is considered to be resident in the Netherlands for Dutch corporate income tax and Dutch dividend withholding tax purposes. In addition, it is intended that, with effect from the Governance Effective Time (or such other date as PSA and FCA may agree), Stellantis will set up and maintain its management and organizational structure in such a manner that it should not be regarded as a tax resident of any other jurisdiction (and in particular of France or Italy) either for domestic law purposes or for the purposes of any applicable tax treaty (notably any applicable tax treaty with the Netherlands) and should be deemed resident only in the Netherlands, including for the purposes of the France-Netherlands and Italy-Netherlands tax treaties.

However, the determination of Stellantis’s tax residency primarily depends upon Stellantis’s place of effective management, which is a question of fact based on all circumstances. Because the determination of Stellantis’s residency is highly fact sensitive, no assurance can be given regarding the final determination of Stellantis’s tax residency.

If Stellantis were concurrently resident in the Netherlands and in another jurisdiction (applying the tax residency rules of that jurisdiction), it may be treated as being tax resident in both jurisdictions, unless such other jurisdiction has a double tax treaty with the Netherlands that includes either (i) a tie-breaker provision which allocates exclusive residence to one jurisdiction only or (ii) a rule providing that the residency needs to be determined based on a mutual agreement procedure and the jurisdictions involved agree (or, as the case may be, are compelled to agree through arbitration) that Stellantis is resident in one jurisdiction exclusively for treaty purposes. In the latter case, if no agreement is reached in respect of the determination of the residency, the treaty may not apply and Stellantis could be treated as being tax resident in both jurisdictions.

It is intended that, with effect from the Governance Effective Time (or such other date as PSA and FCA may agree sufficiently in advance of the closing of the merger), Stellantis will operate in a manner such that it will be eligible for benefits under the tax treaties entered into between the Netherlands and other countries, notably France, Italy and the United States. However, the ability of Stellantis to qualify for such benefits will depend upon (i) Stellantis being treated as a Dutch tax resident for purposes of the relevant tax treaty, (ii) the fulfillment of the requirements contained in each applicable treaty as modified by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (including, but not limited to, any principal purpose test clause) and applicable domestic laws, (iii) the facts and circumstances surrounding Stellantis’s operations and management and (iv) the interpretation of the relevant tax authorities and courts.

No statutory, judicial or administrative authority directly discusses how the receipt, ownership, or disposition of special voting shares should be treated for French, Italian, U.K., or U.S. tax purposes, and as a result, the tax consequences in those jurisdictions are uncertain.

In addition, the fair market value of the special voting shares, which may be relevant to the tax consequences, is a factual determination and is not governed by any guidance that directly addresses such a situation. Because, among other things, the special voting shares are not transferrable and a shareholder will receive amounts in respect of the special voting shares only if Stellantis is liquidated, FCA and PSA believe and intend to take the position that the value of each special voting share is minimal. However, the relevant tax authorities could assert that the value of the special voting shares as determined by Stellantis is incorrect, which could result in significant adverse tax consequences to shareholders holding special voting shares.

Although it is intended that, for U.S. federal income tax purposes, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, there can be no assurances that the merger will so qualify. The completion of the merger, moreover, is not conditioned on the merger qualifying as a “reorganization” within the meaning of Section 368(a) or upon the receipt of an opinion of counsel to that effect. In addition, neither PSA nor FCA intends to request a ruling from the IRS regarding the United States federal income tax consequences of the merger. Accordingly, even if PSA and FCA conclude that the merger qualifies as a “reorganization” within the meaning of Section 368(a), no assurance can be given that the IRS will not challenge that conclusion or that a court would not sustain such a challenge.

In particular, if Stellantis were treated as a PFIC for U.S. federal income tax purposes for any taxable year during which a U.S. shareholder owned the Stellantis common shares, then any gain realized by the U.S. shareholder on the sale or other disposition of the Stellantis common shares would in general not be treated as capital gain. Instead, a U.S. shareholder would be treated as if it had realized such gain ratably over its holding period for the Stellantis common shares. Amounts allocated to the year of disposition and to years before Stellantis became a PFIC would be taxed as ordinary income and amounts allocated to each other taxable year would be taxed at the highest tax rate applicable to individuals or corporations, as appropriate, in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. Similar treatment may apply to certain “excess distributions” as defined in the Code. In addition, if PSA was or had been in the past a PFIC, the exchange of PSA ordinary shares for Stellantis common shares could be taxable to U.S. shareholders.

Section 7874 of the Code provides that, under certain circumstances, a non-U.S. corporation will be treated as a U.S. “domestic” corporation for U.S. federal income tax purposes. In particular, certain mergers of foreign corporations with U.S. subsidiaries can, in certain circumstances, implicate these rules.

FCA and PSA do not believe that Stellantis should be treated as a U.S. “domestic” corporation for U.S. federal income tax purposes. However, the relevant law is not entirely clear, is subject to detailed but relatively new regulations (the application of which is uncertain in various respects, and whose interaction with general principles of U.S. tax law remains untested) and is subject to various other uncertainties. Therefore, the IRS could assert that Stellantis should be treated as a U.S. corporation (and, therefore, a U.S. tax resident) for U.S. federal income tax purposes pursuant to Code Section 7874. In addition, changes to Section 7874 of the Code or the U.S. Treasury Regulations promulgated thereunder, or interpretations thereof, could affect Stellantis’s status as a foreign corporation. Such changes could potentially have retroactive effect. If the IRS successfully challenged Stellantis’s status as a foreign corporation, significant adverse tax consequences would result for Stellantis and for certain of Stellantis’s shareholders. For example, if Stellantis were treated as a domestic corporation in the U.S., Stellantis would be subject to U.S. federal income tax on its worldwide income as if it were a U.S. domestic corporation, and dividends Stellantis pays to non-U.S. shareholders would generally be subject to U.S. federal withholding tax, among other adverse tax consequences. If Stellantis were treated as a U.S. domestic corporation, such treatment could materially increase Stellantis’s U.S. federal income tax liability.

The closing of the merger is not conditioned on Stellantis not being treated as a domestic corporation for U.S. federal income tax purposes or upon a receipt of an opinion of counsel to that effect. In addition, neither FCA nor PSA intends to request a ruling from the IRS regarding the U.S. federal income tax consequences of the merger. Accordingly, while FCA and PSA do not believe that Stellantis will be treated as a domestic corporation, no assurance can be given that the IRS will agree, or that if it challenges such treatment, it will not succeed.

It is intended that Stellantis will maintain a permanent establishment in France to which the assets and liabilities of PSA will be allocated for French tax purposes. However, no assurance can be given regarding the existence of a permanent establishment in France and the allocation of each asset and liability to such permanent establishment because such determination is highly fact sensitive and may vary in case of future changes in the combined group’s management and organizational structure.

The failure by Stellantis to maintain a permanent establishment in France and to allocate assets and liabilities to such permanent establishment could result in significant adverse tax consequences to Stellantis and its subsidiaries. If, at the time of the Merger, Stellantis were to fail to maintain a permanent establishment in France or to allocate any of PSA’s assets and liabilities to such establishment, the main adverse tax consequences would be that (i) the merger would trigger the taxation in France of all unrealized capital gains at the level of PSA and (ii) the tax losses carried forward currently available at the level of PSA would be forfeited. In the future, if Stellantis were to fail to maintain a permanent establishment in France, the main adverse tax consequences would be that (i) all unrealized capital gains at the level of the permanent establishment at that time would be taxed and (ii) the tax losses carried forward that may still be available at that time would be forfeited. In addition, if, in the future, any of PSA’s assets and liabilities cease to be allocated to such establishment, this may result in (i) Stellantis being taxed in France on unrealized capital gains or profits with respect to the assets and liabilities deemed transferred outside of France and (ii) a portion of the tax losses carried forward that may still be available at the time being forfeited.

Stellantis and its subsidiaries will be subject to tax laws, regulations and treaties in the Netherlands, France, Italy, the United States and the numerous other jurisdictions in which Stellantis and its affiliates will operate. These laws, regulations and treaties could change on a prospective or retroactive basis, and any such change could adversely affect Stellantis and its subsidiaries and Stellantis’s shareholders and holders of special voting shares.

Furthermore, these laws, regulations and treaties are inherently complex and Stellantis and its subsidiaries will be obligated to make judgments and interpretations about the application of these laws, regulations and treaties to Stellantis and its subsidiaries and their operations and businesses. The interpretation and application of these laws, regulations and treaties could differ from that of the relevant governmental authority, which could result in administrative or judicial procedures, actions or sanctions, which could be material.

The following tables provide certain per share data of each of FCA and PSA on a stand-alone basis and the unaudited pro forma combined per share data as of June 30, 2020, after giving effect to the merger as if it had occurred as of June 30, 2020 and the unaudited pro forma combined per share data for the six months ended June 30, 2020 and for the year ended December 31, 2019, after giving effect to the merger as if it had occurred as of January 1, 2019.

The historical book value per share is calculated by dividing total stockholders’ equity of both PSA and FCA, by the number of outstanding shares of PSA and FCA (excluding treasury shares and FCA special voting shares), respectively, at the end of the period. The unaudited pro forma combined book value per share is calculated by dividing the unaudited pro forma stockholders’ equity by the unaudited pro forma number of shares outstanding at the end of the period (excluding treasury shares and FCA special voting shares). The unaudited pro forma book value per share gives effect to the merger as if it had occurred as of June 30, 2020.

The unaudited pro forma earnings per share of the combined group is calculated by dividing the unaudited pro forma profit from continuing operations attributable to the combined group’s shareholders by, in the case of unaudited basic pro forma earnings per share, the unaudited pro forma weighted-average of Stellantis’s common shares outstanding over the period, and, in the case of unaudited diluted pro forma earnings per share, such outstanding Stellantis’s common shares plus the impact of instruments that have been determined to be dilutive in the event of a share issuance. The unaudited pro forma earnings per share for the six months ended June 30, 2020 and for the year ended December 31, 2019 give effect to the merger as if it had occurred as of January 1, 2019.

The PSA unaudited pro forma equivalent book value per share, and the PSA unaudited pro forma equivalent post Faurecia Distribution per share, is calculated by multiplying the unaudited pro forma combined book value per share by the exchange ratio of 1.742. The PSA unaudited pro forma equivalent earnings per share, and the PSA unaudited pro forma equivalent post Faurecia Distribution earnings per share, is calculated by multiplying the unaudited pro forma earnings per share of the combined group by the exchange ratio of 1.742.

The following tables provide the historical financial data as of and for the six months ended June 30, 2020 and as of and for the year ended December 31, 2019, for PSA and FCA, respectively, and the historical financial data as of and for the three months ended March 31, 2020, as of and for the three months ended June 30, 2020, and as of and for the three and nine months ended September 30, 2020 for FCA only. The following tables also provide the unaudited pro forma condensed combined financial information and the PSA unaudited pro forma equivalent as of and for the six months ended June 30, 2020 and for the year ended December 31, 2019:

FCA common shares are currently traded on the NYSE and on the MTA. PSA ordinary shares are currently traded on Euronext Paris.

The following table shows the closing sales prices of FCA common shares (as reported on the NYSE and MTA) and PSA ordinary shares (as reported on Euronext Paris) on October 30, 2019, the last full trading day prior to the first public announcement of the proposed merger on October 31, 2019, and on December 17, 2019, the last full trading day prior to the announcement of the signing of the combination agreement.

The PSA Managing Board, the PSA Supervisory Board and the FCA Board continually review their respective companies’ results of operations and competitive positions in the industries in which they operate, as well as their strategic alternatives. In connection with these reviews, each of PSA and FCA, from time to time, has evaluated a range of potential transactions that would further its strategic objectives, including participation in industry consolidation. In particular, FCA has for several years advocated the merits of consolidation in the automotive industry as a means to promote and enable the capital investments required for the transformation towards electric, connected and autonomous driving. Both FCA and PSA have recently completed significant consolidation transactions, FCA with the merger of Fiat and Chrysler, and PSA with the acquisition of Opel Vauxhall.

During the third and fourth quarters of 2018, executives of PSA had several interactions with executives of FCA in order to explore potential limited cooperation programs. These types of projects are common in the automotive industry and are typically limited to certain vehicle models or powertrains. At that stage there were no discussions regarding the opportunity of a potential business combination of the two companies, nor was any acquisition of either party by the other discussed.

On December 21, 2018, Carlos Tavares, PSA’s Chief Executive Officer, contacted Michael Manley, FCA’s Chief Executive Officer, proposing a meeting during the 2019 Geneva International Motor Show, scheduled to be held between March 7 and March 19, 2019 in Switzerland. The meeting was organized in order to explore the possibility of a business combination of the two companies, in addition to the cooperation projects previously discussed. On the same day, Michael Manley confirmed his willingness to participate in such a meeting.

On February 28, 2019, Olivier Bourges, PSA’s Executive Vice President, Programs & Strategy, contacted Doug Ostermann, FCA’s Vice President, Global Head of Business Development and Group Treasurer, in order to discuss the agenda for the upcoming meeting between Carlos Tavares and Michael Manley, as well as certain organizational matters intended to facilitate the discussions between the parties.

On March 4, 2019, Carlos Tavares and Michael Manley met in Geneva, Switzerland ahead of the Geneva International Motor Show. At that meeting, Carlos Tavares and Michael Manley, together with other representatives from FCA and PSA, reviewed the potential cooperation programs previously identified by the parties and discussed a potential business combination between the companies and how to assess the potential synergies resulting from such business combination.

On April 1, 2019, PSA and FCA entered into a confidentiality agreement for the exchange of information in connection with a potential business combination.

On April 2 and April 3, 2019, PSA executives Olivier Bourges and Christophe Pineau travelled to Detroit in order to discuss with Doug Ostermann the possibility of FCA joining a battery joint venture project with PSA. Olivier Bourges took this opportunity to follow-up on the Geneva discussions regarding the potential business combination between the two companies and confirm whether FCA was prepared to assess the potential synergies resulting from such business combination.

On April 16, 2019, Doug Ostermann met with Olivier Bourges in Paris to discuss how the synergies and benefits of a potential business combination could be assessed.

From April 23 to April 25, 2019, members of PSA’s and FCA’s management teams held several meetings at the Paris offices of Bredin Prat, legal advisor to PSA, to explore further the process for estimating the synergies and benefits that could be achieved in a potential business combination, including the potential convergence of vehicle platforms and powertrains. As part of these conversations, the parties also reflected on the status of their preliminary discussions, including organizational and regulatory aspects regarding a reciprocal due diligence investigation and certain regulatory aspects of a potential business combination.

On May 14, 2019, Carlos Tavares and Michael Manley, together with other representatives of FCA and PSA, met to review the merits of the potential business combination of PSA and FCA based on synergies analyses jointly prepared by the PSA and FCA teams over the previous weeks with the support of McKinsey & Company as strategic consultant. Carlos Tavares and Michael Manley exchanged their respective preliminary views on, among other matters, the value creation of such a business combination and the governance of the combined group.

On May 27, 2019, FCA announced that it had delivered a non-binding letter to the board of Groupe Renault proposing a combination of their respective businesses as a 50/50 merger, following discussions between the two companies. As a result, the discussions between PSA and FCA ceased.

On June 6, 2019, FCA issued a press release announcing that the FCA Board had decided to withdraw with immediate effect the merger proposal it had made to Groupe Renault. On the same day, Carlos Tavares contacted Michael Manley, proposing that PSA and FCA restart their discussions regarding a potential business combination of the two companies.

On June 19, 2019, Robert Peugeot, permanent representative of PSA’s shareholder FFP on the PSA Supervisory Board, contacted John Elkann, requesting a meeting in order to restart prior discussions regarding a potential business combination between PSA and FCA.

On July 4, 2019, Robert Peugeot and John Elkann met in Paris to discuss the preliminary terms of a potential business combination, including potential transaction structures and relative valuation levels. The potential terms outlined by Robert Peugeot envisaged an acquisition of FCA by PSA structured in two steps: an initial extraordinary cash dividend distribution by FCA to its shareholders in an amount equal to €4.25bn, followed by a cash and stock offer from PSA to FCA’s shareholders.

On July 7, 2019, Robert Peugeot outlined to John Elkann the terms of a potential business combination in the form of an offer by PSA to acquire FCA at a premium, with the acquisition consideration consisting of both cash and PSA shares, with a similar structure to the one discussed during the meeting held on July 4, 2019. That proposal did not result in any agreement at that stage. Mr. Elkann in particular objected to the structure of the transaction whereby FCA shareholders would be significantly diluted following the combination.

On July 28, 2019, representatives of MMA and Goldman Sachs International (“Goldman Sachs”), FCA’s financial advisor, met telephonically to discuss the new proposal. Goldman Sachs, on behalf of FCA, noted that, while the structure had improved as compared to the prior proposal, the economic terms, including the amount of the cash distribution, had worsened for FCA and did not sufficiently reflect the relative value of the two companies.

From August 1 to August 7, 2019, representatives of MMA held various telephonic meetings with Alain Minc in order to discuss potential improvements to the terms of PSA’s proposal, including the amount of the respective pre-merger distributions to the shareholders of each company in the context of the potential business combination.

On August 5, 2019, representatives of MMA and Morgan Stanley, PSA’s financial advisors, Goldman Sachs and d’Angelin & Co (“d’Angelin”), FCA’s financial advisors, met telephonically to discuss the potential business combination of PSA and FCA and the economic terms of this merger. During this conference call, Goldman Sachs provided feedback on the prior proposals made by PSA, including an analysis supporting a larger cash distribution (compared to the July 4 proposal) to FCA’s shareholders prior to a merger of equals in the €6-7 billion range.

On August 8, 2019, Erik Maris contacted Alain Minc to organize a meeting among Carlos Tavares, Louis Gallois, chairman of the PSA Supervisory Board, and John Elkann.

On August 10, 2019, John Elkann met with Carlos Tavares, Louis Gallois and Erik Maris in Boulogne-Billancourt, France, in order to receive a revised proposal from PSA encompassing a merger of equals between PSA and FCA, including a revision to the proposed pre-merger distributions to FCA’s shareholders. However, no agreement was reached, mainly due to a disagreement between PSA and FCA on the amount of the pre-merger distribution to FCA’s shareholders and, as a result, the discussions were terminated by John Elkann.

On September 11, 2019, Carlos Tavares met with Michael Manley at the Frankfurt International Car Show where they discussed the termination of previous discussions between PSA and FCA regarding a potential merger between the two companies. In the course of these discussions, Carlos Tavares invited Michael Manley to visit PSA’s automotive proving ground to test PSA’s hybrid and electric vehicles.

During October 2019, various calls took place between MMA and Goldman Sachs, where MMA signaled PSA’s willingness to restart discussions on the basis of a new proposal including more significant pre-merger distributions to shareholders of both parties.

On October 11, 2019, Carlos Tavares and Michael Manley met at PSA’s test center in La Ferté-Vidame, France. During this meeting, Carlos Tavares indicated PSA’s willingness to restart the negotiations that were terminated in August 2019. Carlos Tavares and Michael Manley discussed potential synergies and benefits that could be achieved in the proposed business combination, reviewed various options with respect to structuring the governance and management of the combined group and shared their respective views regarding the relative valuation of the two companies and the proposed structure of the merger. Carlos Tavares and Michael Manley also discussed a potential framework for restarting negotiations which in the first stage would only involve MMA and Goldman Sachs. Following this meeting, Michael Manley confirmed that John Elkann was in agreement with the proposed process.

During the second half of October 2019, representatives of MMA and Goldman Sachs held various conference calls, during which they discussed a potential increase of the amounts of the respective pre-merger distributions by PSA and FCA to their shareholders and the governance structure of the combined group, including the composition of the board of directors of the combined group and the future positions of Carlos Tavares and John Elkann.

On October 23, 2019, Erik Maris sent to Goldman Sachs, and Goldman Sachs shared with FCA on the same day, an outline of the main terms of the proposed merger, which reiterated the proposal to structure it as a merger of equals and included a description of the pre-merger distributions to be made by PSA (its stake in Faurecia) and FCA (a €5.5bn extraordinary dividend and its stake in Comau S.p.A. (“Comau”)) to their respective shareholders, elements regarding the future composition of the board of directors of the combined group and the respective roles of Carlos Tavares, as Chief Executive Officer, and John Elkann, as Chairman of the combined group, as well as a list of undertakings to be requested from PSA’s and FCA’s main shareholders.

Between October 25, 2019 and October 27, 2019, PSA informed the representatives of EPF/FFP, BPI and Dongfeng of the terms of the proposed business combination.

On October 27, 2019, Carlos Tavares met with John Elkann in Versailles, France. During this meeting, the parties agreed, subject to approval by the PSA Supervisory Board and the FCA Board, on the main terms of the business combination structured as a merger of equals, including the distribution by FCA, prior to the completion of the merger, of a €5.5 billion extraordinary dividend as well as FCA’s interest in Comau to its shareholders while PSA would, in parallel, distribute its 46% stake in Faurecia to its shareholders. They also discussed the next steps of the process, including due diligence, as well as the timing and process for the preparation of the combination agreement and related documents.

On October 29, 2019, The Wall Street Journal and, over the following days, several other media outlets reported that PSA and FCA were engaged in discussions regarding a potential business combination.

On October 30, 2019, PSA and FCA each issued a press release confirming that the two parties were engaged in ongoing discussions regarding a possible business combination.

On October 30, 2019, the PSA Supervisory Board approved in principle the terms of the contemplated merger.

On October 30, 2019, the FCA Board approved in principle the terms of the contemplated merger.

On October 31, 2019, PSA and FCA issued a joint press release announcing that their respective boards had each unanimously agreed to work towards a full combination of their respective businesses by way of a merger of equals and had given the mandate to their respective management teams to finalize their discussions in order to reach a binding agreement in the coming weeks. The joint press release also highlighted the main terms of the contemplated merger, including estimated synergies, the exchange listings of the combined group’s securities, the agreed governance structure of the combined group as well as information regarding the distributions to be made by the parties to their respective shareholders in advance of the merger.

On November 4, 2019, Sullivan & Cromwell LLP, legal advisor to FCA, sent a summary of the terms of the combination agreement to Bredin Prat, setting out in more detail the terms of a merger of equals between PSA and FCA.

Also on November 4, 2019, representatives of PSA and FCA attended various kick-off meetings in Paris, with the goal of outlining and coordinating the next steps of the process. On the same day, representatives of FCA and PSA, with the assistance of their respective advisors, commenced a reciprocal due diligence investigation of the respective companies’ businesses. On November 6, 2019, in order to facilitate certain aspects of the due diligence process, the parties entered into a “clean team” agreement, amending and supplementing the confidentiality agreement dated April 1, 2019. The parties’ reciprocal due diligence continued until November 23, 2019.

On November 5, 2019, Olivier Bourges and Christophe Pineau together with Doug Ostermann and Silvia Vernetti, the project managers with respect to the contemplated merger of PSA and FCA, respectively, met in Paris in order to prepare the final negotiation process and the reciprocal due diligence as well as to discuss other practical matters, including the timing of the finalization of the contractual documentation.

Between November 12, 2019 and November 19, 2019, PSA sent to EPF/FFP, BPI and Dongfeng a first draft of the undertaking letter agreement, which included, among other things, a commitment by each such shareholder to vote, or cause to be voted, all shares owned or controlled by it in favor of any decision in furtherance of the approval of the merger between PSA and FCA, as well as standstill and lock-up commitments.

On November 27, 2019, Carlos Tavares, Michael Manley and John Elkann met in Turin together with their respective teams and advisors, including representatives of MMA, Goldman Sachs, Sullivan & Cromwell LLP and Bredin Prat, to continue discussions regarding the contemplated merger, including the valuation of the two companies, the governance structure of the combined group, such as the future composition of the board of directors, the terms and structure of the combination agreement, as well as the final steps of the negotiation process.

Between November 4, 2019 and December 17, 2019, PSA and FCA engaged in negotiations with respect to the terms of the contemplated merger including, among others, the future governance of the combined group and its organization (including the location of its statutory and operational seats), the valuation of and the timing of the proposed distribution of FCA’s stake in Comau, the amount of payments in the event of the termination of the combination agreement and other contractual terms relating to representations and warranties, operating covenants and other obligations to be satisfied by the two parties before the consummation of the merger. As a result of continuing discussion among the parties regarding the relative values of the two companies, it was determined that the distribution of FCA’s stake in Comau would be made to the shareholders of the combined group after the closing of the merger, subject to decision by the Stellantis Board. Following the end of the works council consultation process in France and the subsequent approval of the proposed merger by the PSA employee representatives, PSA and FCA reached final agreement on the combination agreement.

On December 17, 2019, PSA’s main shareholders, EPF/FFP, BPI and Dongfeng, executed their respective undertaking letters and FCA’s main shareholder, Exor, executed its undertaking letter, pursuant to which each such shareholder agreed, among other things, to vote its shares in favor of the merger at the extraordinary general meeting of shareholders of PSA and FCA, respectively. In addition, PSA and Dongfeng entered into an agreement pursuant to which PSA agreed to purchase and Dongfeng agreed to sell 30,700,000 of the PSA ordinary shares held by Dongfeng before the closing of the merger.

On December 17, 2019, the PSA Supervisory Board met and, following discussion, approved the merger between FCA and PSA (including the governance structure of the combined entity and the exchange ratio of 1.742 Stellantis common shares for each outstanding ordinary share of PSA, which implied a value of approximately €23.69 per PSA ordinary share based upon the €13.60 closing price per FCA common share on December 17, 2019). The FCA Board met on the same day to consider the terms of the combination agreement. At the meeting of the FCA Board, representatives of each of Goldman Sachs and d’Angelin reviewed a presentation regarding its respective financial analysis of the merger with the FCA Board. Following the presentation, each of Goldman Sachs and d’Angelin rendered its respective oral opinion to the FCA Board, subsequently confirmed by delivery of its respective written opinion dated December 17, 2019 and December 18, 2019, respectively, to the effect that, as of the date of such opinions, taking into account the pre-merger distribution to FCA’s shareholders and based upon and subject to the factors and assumptions described in the opinions to FCA, the exchange ratio of 1.742 Stellantis common shares for each ordinary share of PSA was fair, from a financial point of view to FCA (the full text of the written opinions of Goldman Sachs and d’Angelin, which set forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with such opinions, are attached to this prospectus as Appendix C and Appendix D, respectively). Following deliberations, the FCA Board approved the terms of, and the merger contemplated by, the combination agreement. On the night of December 17, 2019, PSA and FCA entered into the binding combination agreement.

On December 18, 2019, prior to the opening of trading markets in Europe, PSA and FCA issued a joint press release announcing the signing of the combination agreement.

On May 23, 2020, Carlos Tavares and John Elkann discussed telephonically, among other matters, the impact of the COVID-19 pandemic on the businesses of the two companies and the possibility that amendments to the agreed terms of the combination would be appropriate in order to take into account the pandemic’s impact on the expected balance sheet of Stellantis at the closing of the merger. Carlos Tavares and John Elkann agreed to instruct MMA and Goldman Sachs to start exploring such potential amendments.

During the months of June and July 2020, representatives of MMA and Goldman Sachs held several preparatory phone calls in order to exchange views on potential amendments to the initial terms of the combination that would take into account the impact of the COVID-19 pandemic on the expected balance sheet of Stellantis at the closing of the merger, while respecting the balance of the initial economic terms of the combination.

On August 6, 2020, following the publication of PSA’s and FCA’s respective semi-annual financial reports, representatives of MMA and Goldman Sachs met by telephone and discussed a revised structure for the combination in which (i) PSA’s stake in Faurecia would be distributed after the closing of the merger for the benefit of all Stellantis shareholders and (ii) the extraordinary dividend to be distributed by FCA to its shareholders pre-closing would be reduced to account for the value of PSA’s retained stake in Faurecia.

Between August 8, 2020 and August 11, 2020, representatives of MMA and Goldman Sachs held several meetings, during which they discussed the amount by which the extraordinary cash dividend to be distributed by FCA to its shareholders pre-closing would be reduced, with MMA proposing a reduction corresponding to the value of PSA’s stake in Faurecia at the time of the announcement of the intention to merge in October 2019, and Goldman Sachs proposing a reduction corresponding to the value of PSA’s stake in Faurecia in August 2020.

On August 11, 2020, Carlos Tavares and John Elkann had a meeting during which they agreed in principle to propose amendments to the initial terms of the combination by reducing the extraordinary dividend to be distributed by FCA to its shareholders pre‑closing and distributing PSA’s stake in Faurecia after the closing of the merger for the benefit of all Stellantis shareholders.

On August 13, 2020, a summary of terms was exchanged between MMA and Goldman Sachs, which included a broad outline of the proposed terms of the revised merger, including notably (1) reducing the extraordinary cash dividend to be distributed by FCA as described above, (2) distributing PSA’s stake in Faurecia after the closing of the merger for the benefit of all of the Stellantis shareholders, subject to receipt of the requisite corporate approvals, (3) requesting that PSA’s reference shareholders, EPF/FFP, BPI, and Dongfeng, and FCA’s reference shareholder, Exor, amend their respective undertaking letter agreements to include lock‑up commitments with respect to the Faurecia ordinary shares after the distribution of the Faurecia ordinary shares post-closing, (4) providing that each of PSA and FCA would consider a potential distribution of €500 million to their respective shareholders prior to the closing of the merger, provided that each party makes such a distribution, or alternatively a potential €1 billion cash distribution by Stellantis to its shareholders following the closing of the merger and (5) both parties working on an amendment to the combination agreement reflecting the terms above and related matters with the goal of presenting the revised terms of the combination to the PSA Supervisory Board and the FCA Board by mid-September, with a public announcement of the amendment to the combination to follow upon approval by the respective boards.

On August 14, 2020, following further discussions between their respective financial advisors, Carlos Tavares and John Elkann agreed in principle to reduce the extraordinary cash dividend to be distributed by FCA to its shareholders pre-closing by €2.6bn, from €5.5bn as contemplated by the initial terms of the combination to €2.9bn, and to distribute PSA’s stake in Faurecia after the closing of the merger for the benefit of all Stellantis shareholders.

On August 24, 2020 and August 25, 2020 PSA informed EPF/FFP and BPI, and Dongfeng, respectively, of the amended terms of the combination agreement.

On August 28, 2020, Sullivan & Cromwell, counsel to FCA, circulated a more detailed term sheet to Bredin Prat, counsel to PSA, reflecting the summary of terms and supplementing certain non-economic terms of the original combination agreement. Between August 20, 2020 and September 7, 2020, the parties engaged in negotiations on the term sheet and on September 7, 2020, a draft amendment was delivered by Sullivan & Cromwell to Bredin Prat which included a term intended to confirm that the shareholder undertakings executed in connection with the original combination agreement would remain in effect. On September 11, 2020, the parties conducted a management due diligence session regarding Faurecia.

On September 13, 2020, the FCA Board held a meeting by means of video conference and, following discussion, approved the combination agreement amendment. At the meeting, representatives of Goldman Sachs and d’Angelin reviewed the financial aspects of the proposed revised terms of the merger and a representative of Sullivan & Cromwell reviewed the other terms of the proposed amendment. Goldman Sachs presented to the FCA Board materials discussing the history of the share prices and certain financial metrics with respect to FCA, PSA and certain other publicly traded automobile manufacturers since October 29, 2019 (i.e., the day preceding the announcement by FCA and PSA of their engagement in ongoing discussions regarding a possible business combination). The materials also included a comparison of the proposed revised terms of the merger with the terms of the merger as approved by the FCA Board on October 30, 2019, noting in particular that such revised terms included a reduction in the amount of the pre-closing FCA dividend and, as a result of this change, the retention of additional cash by Stellantis, and also the distribution of the Faurecia stake to the Stellantis shareholders promptly after the completion of the merger. Following the presentations, the FCA Board discussed the proposed amendment and after discussion, unanimously determined to approve the revised terms and to reaffirm its recommendation of the merger.

On September 14, 2020, the PSA Supervisory Board met to consider the terms of the proposed amendment to the combination agreement. At the meeting of the PSA Supervisory Board, representatives of Perella Weinberg reviewed a presentation regarding their analysis of the financial terms of the proposed amendment to the combination agreement with the PSA Supervisory Board. Following the presentation, Perella Weinberg rendered to the PSA Supervisory Board its oral opinion, subsequently confirmed in writing, that as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in their opinion, the Exchange Ratio provided for in the combination agreement was fair from a financial point of view to the holders of PSA ordinary shares (the full text of the written opinion of Perella Weinberg, which sets forth, among other things, the various assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Perella Weinberg, is attached to this prospectus as Appendix E and is incorporated by reference in this prospectus). Following deliberations, the PSA Supervisory Board approved unanimously the terms of the combination agreement amendment.

On September 14, 2020, PSA and FCA entered into the amendment to the combination agreement.

On September 14, 2020, after the closing of trading markets in Europe and the United States, PSA and FCA issued a joint press release announcing the signing of the amendment to the combination agreement following unanimous approval by the companies’ boards and strong support by their respective reference shareholders.

Between September 14, 2020 and September 17, 2020, each of PSA’s reference shareholders, EPF/FFP, BPI and Dongfeng, and FCA’s reference shareholder, Exor, entered into undertaking letter agreements providing lock-up commitments with respect to their Faurecia ordinary shares until the end of a six-month period following the completion of the proposed distribution of PSA’s stake in Faurecia to all Stellantis shareholders post-closing.

The FCA Board after due consideration and consultation with FCA’s management and external legal and financial advisors, at a meeting held on December 17, 2019, unanimously approved the original combination agreement and the transactions contemplated by the original combination agreement and, at a meeting held on September 14, 2020, unanimously approved amendments to certain of the terms of the merger. In doing so, the FCA Board considered the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of FCA and PSA, with a view to the best interests of FCA and its stakeholders, including shareholders, employees, debtholders and other creditors, customers, governments and the environment. In making its determination, the FCA Board considered a number of factors, including the following expected benefits:

In connection with its deliberations relating to the merger, the FCA Board also considered potential risks and negative factors concerning the merger and the other transactions contemplated by the combination agreement, including the following:

The following provisions of the combination agreement, though reciprocal with PSA, are unfavorable to FCA:

After consideration of these factors, the FCA Board determined that, overall, the potential benefits of the merger outweighed the potential risks.

The foregoing discussion of factors considered by the FCA Board is not intended to be exhaustive and may not include all the factors considered. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the FCA Board did not attempt to quantify, rank or otherwise assign any relative or specific weights to the factors that it considered in reaching its determination to approve the merger and the combination agreement. In addition, individual members of the FCA Board may have given differing weights to different factors. The FCA Board conducted an overall review of the factors described above and other material factors, including through discussions with, and inquiry of, PSA’s management and outside legal and financial advisors.

The FCA Board, having received extensive legal and financial advice, and having given due and careful consideration to the strategic and financial aspects and consequences of the merger, at a meeting held on December 17, 2019, unanimously approved the merger and, at a meeting held on September 14, 2020, unanimously approved amendments to certain of the terms of the merger. On October 23, 2020, the FCA Board unanimously resolved to approve the Cross-Border Merger Terms. Accordingly, the FCA Board supports and unanimously recommends the merger and recommends that FCA shareholders vote “FOR” adoption and approval of the Cross-Border Merger Terms and the transactions contemplated by the combination agreement.

The PSA Supervisory Board, after due consideration and consultation with PSA’s management and external legal and financial advisors, at a meeting held on December 17, 2019, unanimously approved the merger in accordance with the original combination agreement, as well as the transactions contemplated by the original combination agreement and, at a meeting held on September 14, 2020, unanimously approved amendments to certain of the terms of the merger. In doing so, the PSA Supervisory Board considered a variety of substantive factors, both positive and negative, and the potential benefits and detriments of the merger to PSA, including the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of PSA and FCA, with a view to the best interests of PSA and its shareholders, employees and other stakeholders. In making its determination, the PSA Supervisory Board considered a number of factors, including the following expected benefits:

In connection with its deliberations relating to the merger, the PSA Supervisory Board also considered potential risks and negative factors concerning the merger and the other transactions contemplated by the combination agreement, including the following:

After consideration of these factors, the PSA Supervisory Board determined that, overall, the potential benefits of the merger outweighed the potential risks.

The foregoing discussion of factors considered by the PSA Supervisory Board is not intended to be exhaustive and may not include all the factors considered. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the PSA Supervisory Board did not attempt to quantify, rank or otherwise assign any relative or specific weights to the factors that it considered in reaching its determination to approve the merger and the combination agreement. In addition, individual members of the PSA Supervisory Board may have given differing weights to different factors. The PSA Supervisory Board conducted an overall review of the factors described above and other material factors, including through discussions with, and inquiry of, FCA’s management and outside legal and financial advisors.

The PSA Supervisory Board, having received extensive legal and financial advice, and having given due and careful consideration to the strategic and financial aspects and consequences of the merger, at a meeting held on December 17, 2019, unanimously approved the merger and, at a meeting held on September 14, 2020, unanimously approved amendments to certain of the terms of the merger. On October 27, 2020, the PSA Supervisory Board unanimously resolved to approve the Cross-Border Merger Terms. Accordingly, the PSA Supervisory Board supports and unanimously recommends the merger and recommends that PSA shareholders vote “FOR” adoption and approval of the Cross-Border Merger Terms and the transactions contemplated by the combination agreement.

In considering the recommendation of the PSA Supervisory Board with respect to voting “FOR” adoption and approval of the Cross-Border Merger Terms and the transactions contemplated by the combination agreement, you should be aware that certain members of the PSA Supervisory Board and executive officers of PSA may have interests in the merger which are different from, or in addition to, your interests. The PSA Supervisory Board was aware of and considered these interests, among other matters, in evaluating and negotiating the transaction agreements and the merger and in recommending that PSA shareholders vote “FOR” adoption and approval of the Cross-Border Merger Terms and the transactions contemplated by the combination agreement. For a discussion of these interests, see “The Merger—Interests of Certain Persons in the Merger.”

Goldman Sachs International (“Goldman Sachs”) rendered its opinion to the FCA Board that, as of December 17, 2019, and taking into account the FCA Extraordinary Dividend (in the amount of €5.5 billion as provided in the original combination agreement) and based upon and subject to the factors and assumptions set forth in such opinion, the exchange ratio pursuant to the Definitive Documentation to be entered into pursuant to the combination agreement was fair from a financial point of view to FCA.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

Goldman Sachs also held discussions with members of the senior managements of FCA and PSA regarding their assessment of the strategic rationale for, and the potential benefits of, the merger and the past and current business operations, financial condition, and future prospects of PSA and with members of the senior management of FCA regarding their assessment of the past and current business operations, financial condition and future prospects of FCA; reviewed the reported price and trading activity for the FCA common shares, the PSA ordinary shares and the ordinary shares of Faurecia; compared certain financial and stock market information for FCA and PSA with similar information for certain other companies the securities of which are publicly traded; and performed such other studies and analyses, and considered such other factors as it deemed appropriate.

For purposes of rendering its opinion, Goldman Sachs, with FCA’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it, without assuming any responsibility for independent verification of any such information. In that regard, Goldman Sachs assumed with FCA’s consent that the PSA Forecasts and the FCA Forecasts, including the Synergies, were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of FCA. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of FCA, PSA or Faurecia or any of their respective subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on FCA or PSA or on the expected benefits of the merger in any way meaningful to its analysis. Goldman Sachs also assumed that the merger will be consummated on the terms set forth in the combination agreement, in each case without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis. Goldman Sachs also assumed that the terms set forth in the Definitive Documentation will not differ from those set forth in the combination agreement in any way meaningful to its analysis. In addition, Goldman Sachs assumed with FCA’s consent that the FCA Extraordinary Dividend will have been paid in an amount of €5.50 billion, and that the Faurecia Distribution (contemplating, in accordance with the original combination agreement, the distribution by PSA to its shareholders prior to the closing of the merger, by special or interim dividend, of all of the shares held by PSA in Faurecia) will have been completed, in each case prior to the closing of the merger.

Goldman Sachs’ opinion does not address the underlying business decision of FCA to engage in the merger or the relative merits of the merger as compared to any strategic alternatives that may be available to FCA; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addresses only the fairness from a financial point of view to FCA, as of the date of the opinion and taking into account the payment of the FCA Extraordinary Dividend (in the amount of €5.50 billion, as provided under the original combination agreement), of the Exchange Ratio pursuant to the combination agreement. Goldman Sachs’ opinion does not express any view on, and does not address, any other term or aspect of the combination agreement or the merger or any term or aspect of any other agreement or instrument contemplated by the combination agreement or entered into or amended in connection with the merger, any modifications to the voting rights of the FCA common shares as a result of the merger, the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of FCA; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of FCA or PSA, or class of such persons, in connection with the merger, whether relative to the Exchange Ratio pursuant to the combination agreement or otherwise. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions, as in effect on, and the information made available to it as of the date of the opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. In addition, Goldman Sachs does not express any opinion as to the prices at which the FCA common shares will trade at any time or as to the impact of the merger on the solvency or viability of FCA or PSA or the ability of FCA or PSA to pay its obligations when they come due. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

Goldman Sachs performed illustrative analyses of the implied present value of an illustrative future price per FCA common share on a standalone basis and pro forma for the merger. These analyses are designed to provide an indication of the present value of a theoretical future value of a company’s equity as a function of such company’s estimated future earnings and financial multiples.

For the No Synergies Analysis, Goldman Sachs took into account no Synergies in the estimate of 2022 cash adjusted earnings per share. This analysis indicated a range of illustrative implied equity values per FCA common share, rounded to the nearest Euro, of €20 to €27.

For the Phased Synergies Analysis, Goldman Sachs took into account only a portion of the Synergies potentially realizable in 2022, based on a schedule prepared by the management of FCA and approved for Goldman Sachs’ use by FCA, and taxed at a weighted average tax rate of 23%, to the estimate of 2022 cash adjusted earnings per share while Goldman Sachs assumed that the estimated pro forma net industrial cash position as of December 31, 2021 included the estimated cash flow from the Synergies realizable in 2021. This analysis indicated a range of illustrative implied equity values per FCA common share, rounded to the nearest Euro, of €21 to €29.

For the Run-rate Synergies Analysis, Goldman Sachs took into account the run-rate Synergies as projected, taxed at a weighted average tax rate of 23%, to the estimate of 2022 cash adjusted earnings per share while Goldman Sachs assumed the estimated pro forma net industrial cash position as of December 31, 2021 included the estimated cash flow from the Synergies realizable in 2021. This analysis indicated a range of illustrative implied equity values per FCA common share, rounded to the nearest Euro, of €23 to €32.

Using the FCA Forecasts, the PSA Forecasts and the Synergies, Goldman Sachs performed illustrative discounted cash flow analyses with respect to FCA on a standalone basis and pro forma for the merger.

Using discount rates ranging from 7.0% to 9.0%, reflecting estimates of FCA’s weighted average cost of capital (“WACC”), Goldman Sachs discounted to present value as of June 30, 2019 (i) estimates of the projected unlevered free cash flow for FCA for the six months ended December 31, 2019 and calendar years 2020 through 2022, and (ii) a range of illustrative terminal values for FCA derived by applying enterprise value, which is the market value of common equity plus net debt, to earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples (“EV/EBITDA multiples”) ranging from 1.5x to 3.0x to a terminal year estimate of FCA’s EBITDA as reflected in the FCA Forecasts (which multiples mathematically implied negative perpetuity growth rates ranging from (3.7)% to (15.2)%). The range of EV/EBITDA multiples was derived by Goldman Sachs utilizing its professional judgment and experience, taking into account current and historical last 12 months’ EV/EBITDA multiples for FCA, PSA, Faurecia and the Selected Companies. Goldman Sachs derived such discount rates by application of CAPM, taking into account certain company-specific inputs including FCA’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the FCA common shares, as well as certain financial metrics for the European financial markets generally. Goldman Sachs derived the ranges of illustrative enterprise values for FCA by adding the ranges of present values it derived as described above. Goldman Sachs then added to such a range of illustrative enterprise values the amount of FCA’s net industrial cash as of June 30, 2019, and subtracted therefrom (x) the amount of FCA’s unfunded pension liabilities, taxed at an illustrative tax rate of 25%, and (y) FCA’s non-controlling interests as of June 30, 2019, as provided by the management of FCA, to derive a range of illustrative equity values for FCA as of June 30, 2019. Goldman Sachs then accreted the illustrative equity values for FCA as of June 30, 2019 to present values as of October 29, 2019, by using an illustrative cost of equity of 10%. This analysis indicated a range of illustrative implied equity values per FCA common share, rounded to the nearest Euro, of €21 to €37.

Using discount rates ranging from 7.0% to 9.0%, reflecting estimates of WACC for the pro forma combined group, Goldman Sachs discounted to present value as of June 30, 2019 (i) estimates of the projected unlevered free cash flow for the pro forma combined group for the six months ended December 31, 2019, and calendar years 2020 through 2022 and (ii) a range of illustrative terminal values for the pro forma combined group derived by applying EV/EBITDA multiples ranging from 1.5x to 3.0x to a terminal year estimated EBITDA of the pro forma combined group as reflected in the FCA Forecasts and the PSA Forecasts (which multiples mathematically implied negative perpetuity growth rates ranging from (4.8)% to (16.9)%). The range of EV/EBITDA multiples was derived by Goldman Sachs utilizing its professional judgment and experience, taking into account the current and historical last 12 months’ EV/EBITDA multiples for FCA, PSA, Faurecia and the Selected Companies. Goldman Sachs derived such discount rates by application of CAPM, taking into account certain company-specific inputs including the pro forma combined group’s target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the pro forma combined group, as well as certain financial metrics for the European financial markets generally. Goldman Sachs derived the ranges of illustrative enterprise values for the pro forma combined group by adding the ranges of present values it derived as described above. Goldman Sachs then added to such a range of illustrative enterprise values the amount of the estimated net industrial cash of the pro forma combined group as of June 30, 2019 (before the FCA Extraordinary Dividend is deducted), and subtracted therefrom (x) the amount of unfunded pension liabilities of each of FCA and PSA (excluding Faurecia) as of June 30, 2019, taxed at an illustrative tax rate of 25% and 20%, respectively, and (y) estimated pro forma non-controlling interests as of June 30, 2019, as provided by the management of FCA, to derive a range of illustrative equity values for the pro forma combined group as of June 30, 2019. Goldman Sachs then accreted the illustrative equity values for the pro forma combined group as of June 30, 2019 to present values as of October 29, 2019, by using an illustrative cost of equity of 9.5%, and deducted from such values the amount of the FCA Extraordinary Dividend per share of common stock of the pro forma combined group. Goldman Sachs then added to the illustrative equity values per share of common stock of the pro forma combined group the amount of the FCA Extraordinary Dividend per FCA common share. This analysis indicated a range of illustrative implied equity values per FCA common share, rounded to the nearest Euro, of €22 to €34.

Goldman Sachs also performed an illustrative discounted cash flow analysis to determine the net present value of the Synergies. Using discount rates ranging from 7.0% to 9.0%, reflecting estimates of WACC for the pro forma combined group, Goldman Sachs discounted to present value as of October 29, 2019 (i) estimates of the projected unlevered free cash flow comprising the Synergies for calendar years 2021 to 2029, and (ii) a range of illustrative terminal values for the Synergies by applying the same range of EV/EBITDA multiples (1.5x to 3.0x) to a terminal year estimated EBIT contribution of the Synergies. This analysis indicated a range of illustrative present values of €13 billion to €17 billion, which values were added to the range of illustrative implied equity values for the pro forma combined group described above. The sum was then divided by the number of fully diluted outstanding shares of the pro forma combined group to arrive at per share values. This analysis indicated a range of illustrative implied equity values per FCA common share, rounded to the nearest Euro, of €26 to €40.

For purposes of the Illustrative Present Value of Future Stock Price Analysis and the Illustrative Discounted Cash Flow Analysis described above, using publicly available information, Goldman Sachs calculated the following for FCA, PSA excluding Faurecia, PSA and each of General Motors Corporation (“GM”); Ford Motor Company (“Ford”); Volkswagen AG (“VW”); Daimler AG (“Daimler”); and Bayerische Motoren Werke AG (“BMW” and, together with GM, Ford, VW and Daimler, the “Selected Companies”): (i) the share price to earnings ratio calculated using estimated earnings for 2020 (“2020E P/E”); (ii) Cash Adjusted P/E multiples using estimated earnings for 2020, computed by reducing the share price by the amount of net cash per share and reducing the earnings by the implied loss of interest income corresponding to the deemed elimination of cash (assuming a 0.5% per annum interest rate and a tax rate of 25%); in computing 2020E Cash Adjusted P/E multiples, Goldman Sachs used the net industrial cash position as of June 30, 2019 for FCA, PSA excluding Faurecia and PSA, and as of September 30, 2019 for the Selected Companies; and (iii) enterprise value (“EV”), which is the market value of common equity plus net industrial debt as of June 30, 2019 for FCA, PSA excluding Faurecia and PSA, and as of September 30, 2019 for the Selected Companies, as a multiple of estimated EBITDA for 2019 (“2019E EV/ EBITDA”) and 2020 (“2020E EV/ EBITDA”).

The following table presents the multiples calculated by Goldman Sachs:

Although none of the Selected Companies is directly comparable to FCA and PSA, the Selected Companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of FCA and PSA.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to FCA or PSA or the contemplated merger.

Goldman Sachs prepared these analyses for purposes of Goldman Sachs providing its opinion to the FCA Board as to the fairness from a financial point of view to FCA, as of the date of the opinion and taking into account the payment of the FCA Extraordinary Dividend (in the amount of €5.50 billion, as provided under the original combination agreement), of the Exchange Ratio pursuant to the Definitive Documentation to be entered into pursuant to the combination agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of FCA, PSA, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecasted.

The Exchange Ratio was determined through arm’s-length negotiations between FCA and PSA and was approved by the FCA Board. Goldman Sachs provided advice to FCA during these negotiations. Goldman Sachs did not, however, recommend any specific exchange ratio to FCA or its board of directors or that any specific exchange ratio constituted the only appropriate exchange ratio for the merger.

As described above, Goldman Sachs’ opinion to the FCA Board was one of many factors taken into consideration by the FCA Board in making its determination to approve the combination agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached hereto as Appendix C.

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of FCA, PSA, any of their respective affiliates and third parties, including Exor, a significant shareholder of FCA, EPF/FFP, a significant shareholder of PSA, Dongfeng, a significant shareholder of PSA, and BPI, a significant shareholder of PSA, and their respective affiliates and, as applicable, portfolio companies, or any currency or commodity that may be involved in the transaction contemplated by the combination agreement. Goldman Sachs acted as financial advisor to FCA in connection with, and participated in certain of the negotiations leading to, the merger. Goldman Sachs has provided certain financial advisory and/or underwriting services to FCA and its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as financial advisor to FCA with respect to its sale of Magneti Marelli S.p.A. in May 2019. During the two-year period ended December 17, 2019, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to FCA and/or its affiliates (excluding Exor and/or its affiliates) of approximately $6.2 million. Goldman Sachs also has provided certain financial advisory and/or underwriting services to PSA and its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as bookrunner to Faurecia with respect to its offering of 3.125% senior notes due 2026 (aggregate principal amount €500,000,000) in March 2019. During the two-year period ended December 17, 2019, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to PSA and/or its affiliates (excluding EPF/FFP, Dongfeng, BPI and their respective affiliates) of approximately $0.3 million. Goldman Sachs also has provided certain financial advisory and/or underwriting services to Exor and its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as bookrunner to CNH Industrial Capital LLC, an affiliate of Exor, with respect to the public offering of its 4.200% notes due 2024 (aggregate principal amount $500,000,000) in August 2018; as bookrunner to PartnerRe Limited, an affiliate of Exor, with respect to the public offering of its 3.700% senior notes due 2029 (aggregate principal amount $500,000,000); and as bookrunner to CNH Industrial N.V., an affiliate of Exor, with respect to the public offering of its 1.625% notes due 2029 (aggregate principal amount €500,000,000) in June 2019. During the two-year period ended December 17, 2019, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to Exor and/or its affiliates of approximately $4.0 million. Goldman Sachs also has provided certain financial advisory and/or underwriting services to BPI and its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as bookrunner to Bpifrance Financement S.A., an affiliate of BPI, in connection with the public offering of its 0.250% notes due 2023 (aggregate principal amount €1,000,000,000) in February 2018; as bookrunner to Bpifrance Financement S.A. in connection with the public offering of its 0.625% notes due 2026 (aggregate principal amount €750,000,000) in July 2019; and as bookrunner to BPI France Investissement, an affiliate of Bpifrance, with respect to the public offering of its 0.875% notes due 2028 (aggregate principal amount €50,000,000) in July 2019. During the two-year period ended December 17, 2019, based on Goldman Sachs’ books and records, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to BPI and/or its affiliates of approximately $0.6 million. Goldman Sachs also has provided certain financial advisory and/or underwriting services to the government of the People’s Republic of China (including its agencies and instrumentalities), a significant shareholder of Dongfeng, and their respective affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to PSA, PSA, Exor, EPF/FFP, Dongfeng, BPI, the government of the People’s Republic of China (including its agencies and instrumentalities) and their respective affiliates and, as applicable, portfolio companies, for which the Investment Banking Division of Goldman Sachs may receive compensation. Affiliates of Goldman Sachs & Co. LLC also may have co-invested with Exor and its affiliates from time to time and may have invested in limited partnership units of affiliates of Exor from time to time and may do so in the future.

The FCA Board selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement dated November 4, 2019, FCA engaged Goldman Sachs to act as its financial advisor in connection with the merger. The engagement letter between FCA and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $35 million, $7.5 million of which became payable at announcement of the combination agreement, and the remainder of which is contingent upon consummation of the merger. In addition, FCA has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

FCA has retained d’Angelin & Co. Ltd. (“d’Angelin”) to act as its financial advisor in connection with the merger. FCA selected d’Angelin to act as its financial advisor based on its employees’ qualifications and experience, d’Angelin’s reputation as an internationally recognized investment banking firm and d’Angelin’s familiarity with FCA. As part of this engagement, FCA requested that d’Angelin evaluate the fairness to FCA, from a financial point of view, of the exchange ratio pursuant to the combination agreement, subject to the FCA Extraordinary Dividend (in the amount of €5.50 billion, as provided under the original combination agreement) and the Faurecia Distribution (contemplating, in accordance with the original combination agreement, the distribution by PSA to its shareholders prior to the closing of the merger, by special or interim dividend, of all of the shares held by PSA in Faurecia) (together, the “Proposed Distributions”).

At a meeting of the FCA Board held on December 17, 2019, d’Angelin rendered to the FCA Board its opinion, which d’Angelin subsequently confirmed by delivery of a written opinion dated as of December 18, 2019 (the “Opinion Date”) to the effect that, as of December 17, 2019 and the Opinion Date, respectively, and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by d’Angelin described in d’Angelin’s opinion, the exchange ratio pursuant to the combination agreement was fair, from a financial point of view, to FCA.

In connection with delivering its opinion, d’Angelin, among other things:

For purposes of its analysis and opinion, d’Angelin assumed and relied upon the accuracy and completeness of the financial and other information publicly available, and all of the information supplied or otherwise made available to d’Angelin by FCA, without any independent verification of such information (and does not assume responsibility or liability for any independent verification of such information), and further relied upon the assurance of the management of FCA that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the Management Figures and the Synergies, d’Angelin assumed with FCA’s consent that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of FCA as to the future financial performance of FCA and PSA and the other matters covered thereby. d’Angelin relied, at the direction of FCA, on the assessments of the managements of FCA and PSA as to the ability to achieve the Synergies. d’Angelin expressed no view as to the Management Figures and the Synergies, or the assumptions on which they are based.

For purposes of its analysis and opinion, d’Angelin assumed, in all respects material to its analysis, that (i) the representations and warranties of each party contained in the combination agreement were true and correct, (ii) the Proposed Distributions will occur prior to the merger, (iii) each party would perform all of the covenants and agreements required to be performed by it under the combination agreement, (iv) all conditions to the completion of the merger would be satisfied without waiver or modification of such conditions, and (v) the definitive combination agreement would not differ in any material respect from the draft of the combination agreement furnished to d’Angelin. d’Angelin further assumed, in all respects material to d’Angelin’s analysis, that all governmental, regulatory or other consents, approvals or releases necessary for the completion of the merger would be obtained without any delay, limitation, restriction or condition that would have an adverse effect on FCA, PSA or the completion of the merger or reduce the contemplated benefits to FCA of the merger.

d’Angelin was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness to FCA, from a financial point of view, of the Exchange Ratio (which, for the avoidance of doubt, contemplates the consummation of the Proposed Distributions prior to the merger) as of the Opinion Date. d’Angelin did not express any view on, and d’Angelin’s opinion did not address, the fairness of the proposed merger to, or any consideration received in connection therewith by the officers, directors or employees of FCA or PSA, or any class of such persons, whether relative to the consideration to be paid to the holders of FCA common shares in the merger or otherwise. d’Angelin was not asked to, nor did it express any view on, and d’Angelin’s opinion did not address, the valuation of the Faurecia stake distributed to PSA shareholders other than the value observable in the market on December 12, 2019, nor any other term or aspect of the combination agreement or the merger, including, without limitation, the Proposed Distributions, the structure or form of the merger, or any term or aspect of any other agreement or instrument contemplated by the combination agreement or entered into or amended in connection with the combination agreement. d’Angelin’s opinion did not address the relative merits of the merger as compared to other business or financial strategies that might be available to FCA, nor did it address the underlying business decision of FCA to engage in the merger. d’Angelin did not express any view on, and d’Angelin’s opinion did not address, what the value of FCA common shares actually would be when issued or the prices at which FCA common shares would trade at any time, including following announcement or completion of the merger. d’Angelin is not a legal, regulatory, accounting or tax advisor and relied upon, without independent verification, the accuracy and completeness of assessments by FCA and its advisors with respect to legal, regulatory, accounting and tax matters.

Set forth below is a summary of the material financial analyses reviewed by d’Angelin with the FCA Board on December 17, 2019 in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by d’Angelin. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by d’Angelin. Except as otherwise noted, d’Angelin’s opinion summarized below was based upon information made available to d’Angelin as of the Opinion Date and financial, economic, monetary, market, regulatory and other conditions and circumstances as they existed and as could be evaluated on such date, with the exception of FCA and PSA share prices and Consensus Figures, which were reviewed as of October 29, 2019 (the “Undisturbed Date”). d’Angelin has no obligation to update, revise or reaffirm its opinion based on subsequent developments.

For purposes of its analyses and reviews, d’Angelin considered general business, economic, market and financial conditions, industry sector performance and other matters, as they existed and could be evaluated as of the Opinion Date, many of which are beyond the control of FCA and PSA. These include, among other things, the impact of competition on the business of FCA, PSA and the automotive and automotive finance industries generally, industry growth, and the absence of any material adverse change in the financial condition and prospects of FCA, PSA and the automotive and automotive finance industries, or in the financial markets in general. The estimates contained in d’Angelin’s analyses and reviews, and the ranges of valuations resulting from any particular analysis or review, are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by d’Angelin’s analyses and reviews. In addition, analyses and reviews relating to the value of companies, businesses or securities do not purport to be appraisals or to reflect the prices at which companies, businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, d’Angelin’s analyses and reviews are inherently subject to substantial uncertainty and d’Angelin assumes no responsibility if future results are materially different from those forecasted in such estimates.

For the purposes of the valuation analyses set forth in the sections below, d’Angelin reviewed and compared certain financial information of FCA and PSA to corresponding financial multiples and ratios for the following selected publicly traded companies in the automotive Original Equipment Manufacturer (“OEM”) industry, referred to as the Automotive Peers:

For each of the Automotive Peers, in addition to FCA and PSA, d’Angelin calculated:

In evaluating the Automotive Peers, d’Angelin made judgments and assumptions with regard to general business, economic and market conditions affecting the Automotive Peers and other matters, as well as differences in the Automotive Peers’ financial, business and operating characteristics. Such analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the Automotive Peers and the multiples derived from the Automotive Peers, including market positioning, geographical exposure and specific business perspectives. Mathematical analysis, such as determining the mean or median of valuation multiples cannot, in itself, be deemed a meaningful method of using the data of the Automotive Peers.

When conducting valuation analyses involving Automotive Peers’ trading multiples, d’Angelin assessed the value of FCA and PSA based on both Management Figures and Consensus Figures. For all other valuation analyses, d’Angelin focused primarily on Management Figures. Financial data of the Automotive Peers was based on S&P Capital IQ, public filings and other publicly available information.

In calculating the implied exchange ratios as reflected in the financial analyses described below, d’Angelin used the ranges of implied share prices of FCA and PSA, adjusted for the FCA Extraordinary Dividend (€5.5bn) and the Faurecia Distribution (at market value as of December 12, 2019 and contemplating, in accordance with the original combination agreement, the distribution by PSA to its shareholders prior to the closing of the merger, by special or interim dividend, of all of the shares held by PSA in Faurecia), respectively (the “Distribution-Adjusted Share Prices”). d’Angelin divided the lowest Distribution-Adjusted Share Price for PSA by the highest Distribution-Adjusted Share Price for FCA, to obtain the low end of the exchange ratio range; and divided the highest Distribution-Adjusted Share Price for PSA by the lowest Distribution-Adjusted Share Price for FCA, to obtain the high end of the exchange ratio range.

In valuing FCA and PSA shares, d’Angelin used both sum-of-the-parts (“SOTP”) valuation methodologies and consolidated valuation methodologies (see below), as set forth in the sections below. Under SOTP valuation methodologies, d’Angelin assessed the valuation of core industrial activities (“Industrial Activities”) separately from financial services activities (“Financial Services”) for both FCA and PSA. Under consolidated valuation methodologies, Industrial Activities and Financial Services were valued together on a consolidated basis.

For the purpose of valuing FCA’s Financial Services separately from Industrial Activities, d’Angelin reviewed (i) Price-to-Book Value (“P/BV”) multiples from listed trading comparables, (ii) P/BV from PSA’s acquisition of GM’s European Financial Services, and (iii) P/BV implied from a regression analysis of P/BV – LTM RoE from a list of banking peers, each in an attempt to provide an implied value of FCA’s Financial Services by comparing it to companies conducting similar activities that are publicly traded and a transaction in the industry in which it operates, respectively. Based on the foregoing and based on its professional judgment and experience, d’Angelin applied the P/BV multiple ranges summarized in the table below:

d’Angelin performed a comparable company trading analysis in an attempt to provide an implied value of FCA’s Industrial Activities by comparing it to companies conducting similar activities that are publicly traded. For the purpose of valuing FCA’s Industrial Activities using trading multiples, d’Angelin split FCA’s Industrial Activities into (i) North America, (ii) rest of the world (“ROW”), and (iii) Maserati, each valued separately on an EV/EBITDA basis, in line with research analysts’ methodology in valuing U.S. automotive businesses. Based on selected Automotive Peers’ EV/EBITDA and based on its professional judgment and experience, d’Angelin derived the following valuation, using both Management Figures and Consensus Figures:

d’Angelin performed a discounted cash flow analysis, which is designed to provide an implied value of FCA’s Industrial Activities by calculating the present value of the estimated future cash flows and terminal value of FCA’s Industrial Activities. For the purpose of such valuation, d’Angelin calculated the estimated present value of Industrial Activities’ unlevered, after-tax free cash flows that FCA was forecasted to generate during FCA’s fiscal years 2019 through 2022 based on Management Figures. For purposes of this analysis, unlevered after-tax free cash flows were calculated as EBITDA, less taxes, plus / minus change in net working capital and less capital expenditures. d’Angelin calculated terminal values for FCA’s Industrial Activities by applying an exit EV/EBIT multiple range of 2.5-3.0x, based on Automotive Peers’ Historical EV/EBIT multiples and d’Angelin’s professional judgment and experience, to a terminal year estimate of the unlevered, after-tax free cash flows that FCA was forecasted to generate based on Management Figures. The cash flows and terminal values in each case were then discounted to present value as of December 12, 2019 using the mid-year cash flow discounting convention and a discount rate of 8.1%, which discount rate was selected, upon the application of d’Angelin’s professional judgment and experience, to reflect a weighted average cost of capital calculation for FCA Industrial Activities. The DCF assumptions and implied valuation are summarized in the table below:

Using the foregoing valuations of FCA’s Financial Services and Industrial Activities, along with FCA’s forecasts and the number of fully diluted outstanding FCA common shares as provided to d’Angelin by FCA’s management, this valuation analysis indicated the following ranges of equity value of FCA and implied per share equity value for FCA common shares:

For the purpose of valuing PSA’s Financial Services, and in line with the valuation performed for FCA’s Financial Services, d’Angelin reviewed (i) P/BV multiples from listed trading comparables, (ii) P/BV from PSA’s acquisition of GM’s European Financial Services, and (iii) P/BV implied from a regression analysis of P/BV – LTM RoE from a list of European banking peers, each in an attempt to provide an implied value of PSA’s Financial Services by comparing it to companies conducting similar activities that are publicly traded and a transaction in the industry in which it operates, respectively. Based on the foregoing and based on its professional judgment and experience, d’Angelin applied the P/BV multiple ranges summarized in the table below:

d’Angelin performed a comparable company trading analysis in an attempt to provide an implied value of PSA’s Industrial Activities by comparing it to companies conducting similar activities that are publicly traded. For the purpose of valuing PSA’s Industrial Activities using trading multiples, d’Angelin valued Industrial Activities on an EV/EBIT basis, in line with research analysts’ methodology in valuing European automotive businesses. Based on selected Automotive Peers’ EV/EBIT and based on its professional judgment and experience, d’Angelin applied the trading multiple reference ranges summarized in the table below:

d��Angelin performed a discounted cash flow analysis, which is designed to provide an implied value of PSA’s Industrial Activities by calculating the present value of the estimated future cash flows and terminal value of PSA’s Industrial Activities. For the purpose of such valuation, d’Angelin calculated the estimated present value of Industrial Activities’ unlevered, after-tax free cash flows that PSA was forecasted to generate during PSA’s fiscal years 2019 through 2022 based on Management Figures. For purposes of this analysis, unlevered after-tax free cash flows were calculated as EBITDA, less taxes, plus / minus change in net working capital and less capital expenditures. d’Angelin calculated terminal values for PSA’s Industrial Activities by applying an exit EV/EBIT multiple range of 2.5-3.0x, based on Automotive Peers’ Historical EV/EBIT multiples and d’Angelin’s professional judgment and experience, to a terminal year estimate of the unlevered, after-tax free cash flows that PSA was forecasted to generate based on Management Figures. The cash flows and terminal values in each case were then discounted to present value as of December 12, 2019 using the mid-year cash flow discounting convention and a discount rate of 8.4%, which discount rate was selected, upon the application of d’Angelin’s professional judgment and experience, to reflect a weighted average cost of capital calculation for PSA’s Industrial Activities. The DCF assumptions and implied valuation are summarized in the table below:

Using the foregoing valuations of PSA’s Financial Services and Industrial Activities, along with PSA’s forecasts and the number of fully diluted outstanding PSA ordinary shares as provided to d’Angelin by FCA’s management, this valuation analysis indicated the following ranges of equity value of PSA and implied per share equity value for PSA ordinary shares:

Utilizing the implied equity value reference ranges derived for FCA and PSA described above, d’Angelin calculated the following implied exchange ratio ranges (as explained above), in each case compared to the Exchange Ratio of 1.742 pursuant to the combination agreement:

For the purpose of valuing FCA’s consolidated business using trading multiples, d’Angelin used a trading P/E valuation methodology. Based on selected Automotive Peers’ P/E and based on its professional judgment and experience, d’Angelin applied the trading multiple reference ranges summarized in the table below:

For the purpose of valuing PSA’s consolidated business using trading multiples, d’Angelin used a trading P/E valuation methodology. Based on selected Automotive Peers’ P/E and based on its professional judgment and experience, d’Angelin applied the trading multiple reference ranges summarized in the table below:

Utilizing the implied equity value reference ranges derived for FCA and PSA described above, d’Angelin calculated the following implied exchange ratio ranges (as explained above), in each case compared to the Exchange Ratio of 1.742 pursuant to the combination agreement:

d’Angelin also noted certain other factors, which were not considered material to its financial analyses with respect to its opinion, but were referenced for informational purposes only, including, among other things, the following:

d’Angelin reviewed historical trading prices of FCA common shares during the 12-month period ended on the Undisturbed Date, noting that the low and high closing prices during such period ranged from approximately €10.71 to approximately €13.15 per FCA common share, respectively, and a range of equity value of €17.0 billion to €20.9 billion, respectively.

d’Angelin reviewed historical trading prices of PSA ordinary shares during the 12-month period ended on the Undisturbed Date, noting that the low and high closing prices during such period ranged from approximately €16.63 to approximately €25.04 per PSA ordinary share, respectively, and a range of equity value of €15.7 billion to €23.6 billion, respectively.

The 52-week trading range analysis implies an exchange ratio range of 1.37x - 2.99x.

d’Angelin reviewed selected public market trading price targets for the FCA common shares prepared and published by equity research analysts that were publicly available prior to the Undisturbed Date. These price targets, which ranged from €12.00 to €14.70 per FCA common share (excluding first and last quartiles, to remove outliers), reflect analysts’ estimates of the future public market trading price of the FCA common shares at the time the price target was published. The price targets range implied a range of equity value of approximately €19.0 billion to approximately €23.3 billion. Public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for the FCA common shares and these target prices and the analysts’ earnings estimates on which they were based are subject to risk and uncertainties, including factors affecting the financial performance of FCA and future general industry and market conditions.

d’Angelin reviewed selected public market trading price targets for the PSA ordinary shares prepared and published by equity research analysts that were publicly available prior to the Undisturbed Date. These price targets, which ranged from €21.00 to €28.25 per PSA ordinary share (excluding first and last quartiles, to remove outliers), reflect analysts’ estimates of the future public market trading price of the PSA ordinary shares at the time the price target was published. The price targets range implied a range of equity value of approximately €19.8 billion to approximately €26.6 billion. Public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for the FCA common shares and these target prices and the analysts’ earnings estimates on which they were based are subject to risk and uncertainties, including factors affecting the financial performance of FCA and future general industry and market conditions.

The equity research analyst target prices imply an exchange ratio range of 1.57x - 2.91x.

d’Angelin reviewed the illustrative IRR to FCA shareholders, calculated over a three-year period, under several scenarios: (i) FCA standalone, (ii) FCA merger with PSA assuming phased synergies (with potential re-rating), and (iii) FCA merger with PSA assuming phased synergies until 2022 and steady state synergies by 2023 (with potential re-rating). The analysis assumes the purchase of one FCA share on the Undisturbed Date, 20% payout ratio during the three-year period and the payment of FCA’s €5.5 billion special dividend. Under Management Figures, this analysis resulted in an illustrative IRR to FCA shareholders of 29.2% - 66.6% under the two merger scenarios above, compared to 21.3% standalone. Under Consensus Figures, this analysis resulted in an illustrative IRR to FCA shareholders of 19.3% - 49.7% under merger scenarios, compared to 11.1% standalone.

The foregoing summary of d’Angelin’s financial analyses does not purport to be a complete description of the analyses or data presented by d’Angelin to the FCA Board. In connection with the review of the merger by the FCA Board, d’Angelin performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying d’Angelin’s opinion. In arriving at its fairness determination, d’Angelin considered the results of all the analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes of its opinion. Rather, d’Angelin made its determination as to fairness on the basis of its professional judgment and experience after considering the results of all the analyses. In addition, d’Angelin may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be taken to be the view of d’Angelin with respect to the actual value of the FCA common shares at any time. Rounding may result in total sums set forth in this section not equaling the total of the figures shown.

d’Angelin’s financial advisory services and its opinion were provided for the information and benefit of the FCA Board (in its capacity as such) in connection with its evaluation of the proposed merger. The issuance of d’Angelin’s opinion was approved by d’Angelin’s Fairness Opinion Committee in accordance with d’Angelin’s customary practice. d’Angelin’s opinion and its presentation to the FCA Board was one of many factors taken into consideration by the FCA Board in deciding to consider, approve and declare the advisability of the combination agreement and the transactions contemplated thereby. Consequently, the analyses described above should not be viewed as determinative of the opinion of the FCA Board with respect to the Exchange Ratio pursuant to the combination agreement or of whether the FCA Board would have been willing to agree to a different exchange ratio.

The Exchange Ratio was determined by FCA and PSA through arm’s-length negotiations and was approved by the FCA Board. d’Angelin did not recommend any specific exchange ratio to FCA or the FCA Board or opine that any specific exchange ratio constituted the only appropriate exchange ratio for the merger.

d’Angelin acted as financial advisor to FCA in connection with, and participated in certain of the negotiations leading to, the merger. d’Angelin has provided certain financial advisory services to FCA and its affiliates from time to time, in particular starting from January 2019, for which d’Angelin received, and may receive, compensation, including acting as financial advisor to FCA with respect to FCA’s exploration of a potential business combination with Groupe Renault. During the two-year period prior to the Opinion Date d’Angelin recognized compensation for its financial advisory services provided to FCA and/or its affiliates of approximately €0.4 million. In addition, pursuant to the terms of d’Angelin’s engagement letter dated March 4, 2019 and subsequent addendums with FCA, FCA paid or agreed to pay d’Angelin fees for its services with respect to the merger in the aggregate amount of approximately €6.5 million, €2 million of which became payable in connection with advice relating to the merger and the delivery of a fairness opinion and €4.5 million of which will become payable upon completion of the merger. FCA has also agreed to reimburse d’Angelin for its expenses and to indemnify d’Angelin against certain liabilities arising out of its engagement.

In addition, during the two-year period prior to the Opinion Date, d’Angelin was not engaged to provide financial advisory or other services to PSA and d’Angelin did not receive any compensation from PSA. d’Angelin may provide financial advisory or other services to FCA and PSA in the future in connection with which d’Angelin may receive compensation.

d’Angelin regularly engages in a wide range of activities for its own accounts and the accounts of customers, including corporate finance, mergers and acquisitions, capital markets advisory and related activities.

The PSA Supervisory Board retained Perella Weinberg to act as its financial advisor in connection with a potential transaction involving FCA. PSA selected Perella Weinberg based on Perella Weinberg’s qualifications, expertise and reputation and its knowledge of the business and affairs of PSA and the industries in which PSA conducts its business. Perella Weinberg, as part of its investment banking business, is continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, leveraged buyouts and other transactions as well as for corporate and other purposes.

On September 14, 2020, Perella Weinberg rendered to the PSA Supervisory Board its oral opinion, subsequently confirmed in writing that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in its opinion, the Exchange Ratio provided for in the combination agreement was fair from a financial point of view to the holders of PSA ordinary shares.

In arriving at its opinion, Perella Weinberg, among other things:

In arriving at its opinion, Perella Weinberg assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information supplied or otherwise made available to it (including information that is available from generally recognized public sources) for purposes of its opinion and further relied upon the assurances of the PSA Supervisory Board that, to the PSA Supervisory Board’s knowledge, the information furnished, or approved for Perella Weinberg’s use, by the PSA Supervisory Board for purposes of Perella Weinberg’s analysis did not contain any material omissions or misstatements of material fact. Perella Weinberg assumed with the PSA Supervisory Board’s consent that there were no material undisclosed liabilities of PSA or FCA for which adequate reserves or other provisions had not been made. As the PSA Supervisory Board was aware, Perella Weinberg had not been provided with, and did not have access to, financial forecasts relating to PSA or FCA, prepared either by the management of PSA or FCA. In that regard, Perella Weinberg had been advised by the PSA Supervisory Board and assumed, with the PSA Supervisory Board’s consent, that the Public Forecasts were a reasonable basis upon which to evaluate the future financial performance of PSA and FCA and Perella Weinberg used the Public Forecasts in performing its analysis. Perella Weinberg assumed, with the PSA Supervisory Board’s consent, that the Anticipated Synergies and potential strategic implications and operational benefits (including the amount, timing and achievability thereof) anticipated by the management of PSA to result from the Amended Transaction would be realized in the amounts and at the times projected by the management of PSA, and Perella Weinberg expressed no view as to the assumptions on which they were based. Perella Weinberg relied without independent verification upon the assessment by the management of PSA and the PSA Supervisory Board of the timing and risks associated with the integration of PSA and FCA. In arriving at its opinion, Perella Weinberg did not make any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of PSA or FCA, nor was it furnished with any such valuations or appraisals, nor did it assume any obligation to conduct, nor has it conducted, any physical inspection of the properties or facilities of PSA or FCA. In addition, Perella Weinberg did not evaluate the solvency of any party to the combination agreement, including under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Perella Weinberg assumed that the final combination agreement amendment would not differ in any material respect from the Draft Amendment reviewed by them and that the Amended Transaction would be consummated in accordance with the terms set forth in the combination agreement, without material modification, waiver or delay, in particular regarding the FCA Extraordinary Dividend, and that all representations and warranties in the original combination agreement were true and correct when made and that all representations and warranties in the combination agreement would be true and correct as of the closing of the Amended Transaction. In addition, Perella Weinberg assumed that in connection with the receipt of all the necessary approvals of the proposed Amended Transaction, no delays, limitations, conditions or restrictions would be imposed that could have an adverse effect on PSA, FCA or the contemplated benefits expected to be derived in the Amended Transaction. Perella Weinberg relied as to all legal matters relevant to rendering its opinion upon the advice of counsel.

Perella Weinberg’s opinion addressed only the fairness from a financial point of view, as of the date thereof, of the Exchange Ratio provided for in the combination agreement to the holders of the PSA ordinary shares. Perella Weinberg was not asked to, nor did it, offer any opinion as to any other term of the combination agreement or any other document contemplated by or entered into in connection with the combination agreement or the form or structure of the Amended Transaction or the likely timeframe in which the Amended Transaction would be consummated. In addition, Perella Weinberg expressed no opinion as to the fairness of the amount or nature of any compensation to be received by any officers, directors or employees of any parties to the combination agreement, or any class of such persons, whether relative to the Exchange Ratio or otherwise. Perella Weinberg did not express any opinion as to any tax or other consequences that may result from the transactions contemplated by the combination agreement or any other related document, nor did its opinion address any legal, tax, regulatory or accounting matters, as to which it understood PSA had received such advice as it deemed necessary from qualified professionals. Perella Weinberg’s opinion does not address PSA’s underlying business decision to enter into the combination agreement or the relative merits of the Amended Transaction as compared with any other strategic alternative which may be available to PSA. Perella Weinberg was not authorized to solicit, and did not solicit, indications of interest in a transaction with PSA from any party.

Perella Weinberg’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Perella Weinberg as of, the date of its opinion. In particular, the financial, credit and stock markets had been experiencing unusual volatility and Perella Weinberg expressed no view or opinion as to the potential effects of such volatility on PSA, FCA or the Amended Transaction. It should be understood that subsequent developments may affect Perella Weinberg’s opinion and the assumptions used in preparing it, and Perella Weinberg does not have any obligation to update, revise, or reaffirm its opinion. The issuance of Perella Weinberg’s opinion was approved by a fairness opinion committee of Perella Weinberg.

The following is a summary of the material financial analyses performed by Perella Weinberg and reviewed by the PSA Supervisory Board in connection with Perella Weinberg’s opinion relating to the Amended Transaction and does not purport to be a complete description of the financial analyses performed by Perella Weinberg. The order of analyses described below does not represent the relative importance or weight given to those analyses by Perella Weinberg.

Some of the summaries of the financial analyses include information presented in tabular format. In order to fully understand Perella Weinberg’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Perella Weinberg’s financial analyses.

Perella Weinberg performed a selected publicly-traded companies analysis, which is a method of deriving an implied value range for a company’s equity securities based on a review of selected publicly-traded companies generally deemed relevant for comparative purposes. Perella Weinberg reviewed financial market multiples and ratios of the following selected publicly-traded companies:

Although none of the above companies is identical to PSA or FCA, Perella Weinberg selected these companies because they had publicly traded equity securities and were deemed to be similar to PSA and FCA in one or more respects.

For each of the selected public-traded companies, Perella Weinberg calculated and compared financial information and financial market multiples and ratios based on company filings for historical information and consensus third party research estimates for forecasted information.

Based on the analysis of the relevant metrics described above and on professional judgments made by Perella Weinberg, Perella Weinberg selected and applied a median multiple from Groupe Renault and Volkswagen AG of 2.00x, implying a range of multiples of 1.75x to 2.25x, to the 2021E Adjusted EBITDA of PSA using the Public Forecasts, and applied a median multiple from Groupe Renault, Volkswagen AG, Ford Motor Company and General Motors Company of 2.75x implying a range of multiples of 2.50x to 3.00x, to the 2021E Adjusted EBITDA of FCA using the Public Forecasts.

For the purpose of valuing PSA and FCA’s financing services, Perella Weinberg reviewed PSA’s acquisition multiple of General Motors Company’s European Financial Services of 0.8x Price-to-book Value, and the valuation of Original Equipment Manufacturers’ Financial Services by selected equity research analysts at 0.8x Price-to-Book Value. Perella Weinberg applied such ratio to the book value of each of PSA’s and FCA’s respective financing services business to determine the value of such businesses.

From these analyses, Perella Weinberg derived ranges of implied equity values per share for each of PSA and FCA. Perella Weinberg calculated implied values per share by dividing the implied equity values by the applicable fully diluted shares (based upon the number of issued and outstanding shares and the number of shares resulting from dilutive instruments) (“Implied Values per Share”). The ranges of Implied Values per Share derived from these calculations are summarized in the following table:

Although the selected publicly-traded companies were used for comparison purposes, no business of any selected company was either identical or directly comparable to PSA’s or FCA’s business. Perella Weinberg’s comparison of selected publicly-traded companies to PSA and FCA and analysis of the results of such comparisons were not purely mathematical, but instead necessarily involved complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the relative values of the selected publicly-traded multiples.

Perella Weinberg performed a standalone discounted flow analysis, which is a method of deriving an implied value for a company’s equity securities based on the sum of the company’s unlevered after tax free cash flows over a forecast period and the terminal value at the end of the forecast period. In performing this analysis, Perella Weinberg used the Public Forecasts and:

The standalone discounted cash flow analysis did not consider the Anticipated Synergies resulting from the proposed merger.

From these analyses, Perella Weinberg derived ranges of implied equity values per share for each of PSA and FCA. The ranges of Implied Values per Share derived from these calculations are summarized in the following table:

Perella Weinberg reviewed the historical closing market prices for each of the PSA ordinary shares and FCA common shares for the 52-week period ended October 29, 2019 and used a range midpoint defined as the October 29, 2019 last three months Volume Weighted Average Price (“VWAP”) trading price per PSA ordinary share and per FCA common share. The midpoint and the ranges of Implied Values per Share derived from these calculations are summarized in the following table:

Perella Weinberg reviewed target prices for PSA and FCA from publicly available research reports covering both companies: (i) ten selected equity research reports publicly available prior to October 29, 2019 and (ii) twelve selected equity research reports publicly available prior to September 9, 2020. Perella Weinberg noted that the range of these equity research analyst target prices was (i) €21.0 to €32.0 per PSA ordinary share and €10.0 to €16.5 per FCA common share as of October 29, 2019 and (ii) €9.3 to €25.0 per PSA ordinary share and €4.6 to €14.9 per FCA common share as of September 9, 2020.

Perella Weinberg then calculated the implied adjusted exchange ratio (the “Implied Adjusted Exchange Ratio”) for each PSA ordinary share, based on the ratio between PSA’s and FCA’s value per share, for each of the selected valuation methodologies. In calculating the Implied Adjusted Exchange Ratio, Perella Weinberg adjusted the FCA value per share determined by the selected valuation methodology for the payment of the FCA Extraordinary Dividend divided by FCA’s fully diluted number of common shares.

For the Equity Research Target Price Analysis, Perella Weinberg divided the value per share for PSA by the value per share for FCA, adjusted for the value per share of the payment of the FCA Extraordinary Dividend for each equity research report covering both companies. Perella Weinberg then retained (i) the lowest of these ratios to obtain the low end of the Implied Adjusted Exchange Ratio range; and (ii) the highest of these ratios to obtain the high end of the Implied Adjusted Exchange Ratio range.

For the other selected valuation methodologies, Perella Weinberg divided the lowest value per share for PSA by the highest value per share for FCA, adjusted for the value per share of the payment of the FCA Extraordinary Dividend, to obtain the low end of the Implied Adjusted Exchange Ratio range; and divided the highest value per ordinary share for PSA by the lowest value per common share for FCA, adjusted for the value per share of the payment of the FCA Extraordinary Dividend, to obtain the high end of the Implied Adjusted Exchange Ratio range.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth in this prospectus, without considering the analyses or the summary as a whole, could create an incomplete view of the processes underlying Perella Weinberg’s opinion. In arriving at its fairness determination, Perella Weinberg considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered. Rather, Perella Weinberg made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the analyses described in this prospectus as a comparison is directly comparable to PSA, FCA or the Amended Transaction.

Perella Weinberg prepared the analyses described in this prospectus for purposes of providing its opinion to the PSA Supervisory Board as to the fairness, from a financial point of view, as of the date of its opinion, of the Exchange Ratio provided in the combination agreement to the holders of PSA ordinary shares. These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Perella Weinberg’s analyses were based on third party research analyst estimates, which are not necessarily indicative of actual future results, and which may be significantly more or less favorable than suggested by Perella Weinberg’s analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties to the combination agreement or their respective advisors, none of PSA, FCA, Perella Weinberg or any other person assumes responsibility if future results are materially different from those forecasted by the third parties.

As described above, the opinion of Perella Weinberg to the PSA Supervisory Board was one of many factors taken into consideration by the PSA Supervisory Board in making its determination to approve the Amended Transaction. Perella Weinberg was not asked to, and did not, recommend the Exchange Ratio provided for in the combination agreement, which consideration was determined through arm-length negotiations between PSA and FCA. Perella Weinberg did not recommend any specific exchange ratio to the holders of PSA ordinary shares or the PSA Supervisory Board or that any specific exchange ratio constituted the only appropriate exchange ratio or consideration for the Amended Transaction.

Pursuant to the terms of the engagement letter between Perella Weinberg and the PSA Supervisory Board dated October 28, 2019, as amended on September 14, 2020, PSA (i) paid Perella Weinberg monthly retainer fees since August 1, 2019 for a total amount paid to date of €175,000 (creditable against the other fees) and an announcement fee of €1 million, and (ii) further agreed to pay Perella Weinberg €1 million (creditable against the success fee) upon the delivery of Perella Weinberg’s opinion, as well as a success fee of €6 million upon the consummation of the Amended Transaction and a discretionary fee of up to €1 million. PSA has agreed to indemnify Perella Weinberg and related persons for certain liabilities and other items that may arise out of its engagement by the PSA Supervisory Board and the rendering of its opinion.

During the two-year period prior to the date of its opinion, neither Perella Weinberg nor its affiliates have had material relationships, other than the services provided in connection with the Amended Transaction and the rendering of its opinion, with PSA or FCA or their respective affiliates for which compensation was received or is intended to be received by Perella Weinberg or its affiliates. Perella Weinberg and its affiliates may in the future provide investment banking and other financial services to PSA, FCA and their respective affiliates and for which it would expect to receive compensation for the rendering of such services. In the ordinary course of their business activities, Perella Weinberg or its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for their own account or the accounts of customers or clients, in debt or equity or other securities (or related derivative securities) or financial instruments (including bank loans or other obligations) of PSA, FCA or any of their respective affiliates.

Certain of the directors and officers of FCA may have interests in the merger that are different from, or in addition to, the interests of the FCA shareholders. The FCA Board was aware of and considered these interests during its deliberations on the merits of the merger or approved the related arrangements in the context of, or following, the discussions regarding the merger. For purposes of the disclosure below, FCA’s officers consist of John Elkann, Chairman; Michael Manley, Chief Executive Officer; Richard Palmer, Chief Financial Officer; Pietro Gorlier, Chief Operating Officer EMEA and Global Head of Parts & Service; Antonio Filosa, Chief Operating Officer LATAM; Mark Stewart, Chief Operating Officer North America; Davide Grasso, Chief Operating Officer Maserati; and Giorgio Fossati, General Counsel. These interests include the following:

Certain of the directors and officers of PSA may have interests in the merger that are different from, or in addition to, the interests of the PSA shareholders. The PSA Supervisory Board was aware of, and considered, these interests during its deliberations on the merits of the merger or approved the related arrangements in the context of the discussions regarding the merger. For purposes of the disclosure below, PSA’s officers consist of: Carlos Tavares, Chairman of the Managing Board, Jean-Philippe Imparato, Executive Vice President Peugeot Brand, Vincent Cobée, Executive Vice President Citroën Brand, Béatrice Foucher, Executive Vice President DS Automobiles Brand, Michael Lohscheller, Executive Vice President Opel Automobile GmbH, Patrice Lucas, Executive Vice President Latin America Region, Maxime Picat, Executive Vice President, Director Europe Region, Samir Cherfan, Executive Vice President, Middle-East and Africa Region, Emmanuel Delay, Executive Vice President India-Asia-Pacific Region, Michelle Wen, Executive Vice President, Global Purchasing and Supplier Quality, Philippe de Rovira, Chief Financial Officer, Arnaud Deboeuf, Executive Vice President, Manufacturing and Supply Chain, Olivier Bourges, Executive Vice President, Programs and Strategy, Nicolas Morel, Executive Vice President Research & Development, Xavier Chéreau, Executive Vice President, Human Resources and Transformation, Digital and Real Estate, Brigitte Courtehoux, Executive Vice President Free2Move Brand, Grégoire Olivier, General Secretary, Executive Vice President China and Jean-Christophe Quémard, Executive Vice-President Quality and Customer Satisfaction. These interests include the following:

FCA shareholders will not have dissenters’, appraisal, cash exit or similar rights in connection with the merger.

PSA shareholders will not have dissenters’, appraisal, cash exit or similar rights in connection with the merger.

The merger will be accounted for using the acquisition method of accounting in accordance with IFRS 3, Business Combinations (“IFRS 3”), which requires the identification of the acquirer and the acquiree for accounting purposes. Based on the assessment of the indicators under IFRS 3 and consideration of all pertinent facts and circumstances, FCA and PSA’s management determined that PSA is the acquirer for accounting purposes and as such, the merger is accounted for as a reverse acquisition.

In identifying PSA as the acquiring entity, notwithstanding that the merger is being effected through an issuance of FCA shares, the most significant indicators were (i) the composition of the combined group’s board, which will comprise 11 directors, six of whom are to be nominated by PSA, PSA shareholders or PSA employees, or are current PSA executives, (ii) the combined group’s first CEO, who is vested with the full authority to individually represent the combined group, is the current president of the PSA Managing Board, and (iii) the payment of a premium by pre-merger PSA shareholders.

As a result, PSA will apply the acquisition method of accounting and the assets and liabilities of FCA will be recorded, as of the completion of the merger, at their respective fair values. Any excess of the consideration transferred over the fair value of FCA’s assets acquired and liabilities assumed will be recorded as goodwill. PSA’s assets and liabilities together with PSA’s operations will continue to be recorded at their pre-merger historical carrying values for all periods presented in the consolidated financial statements of the combined group. Following the completion of the merger, the earnings of the combined group will reflect the impacts of purchase accounting adjustments, including any changes in amortization and depreciation expense for acquired assets.

The final amount of the consideration transferred will be determined as of the date of the completion of the merger. The purchase accounting adjustments have not yet been completed. The completion of the purchase accounting, in which FCA’s assets acquired and liabilities assumed will be recognized at their respective fair values, will be finalized after the completion of the merger and could result in significantly different valuations, as well as differences in amortization, depreciation and other expenses, compared to those presented in the unaudited pro forma financial information.

It is intended that, for French corporate income tax purposes, the merger benefits from the favorable regime set forth in Article 210 A of the French Tax Code, with PSA’s assets and liabilities to be allocated to a French permanent establishment of Stellantis pursuant to the merger. This tax regime mainly provides for a deferral of taxation of the capital gains realized by PSA in connection with the transfer of all its assets and liabilities as a result of the merger. A ruling has been requested from the French tax authorities to confirm the applicability of such regime.

In addition, it is also intended that a new French tax consolidated group is set up by the French permanent establishment of Stellantis, with effect as from January 1 of the tax year during which the merger is completed, and includes certain companies of the existing PSA French tax consolidated group. As required by law, a tax ruling request has been filed with the French tax authorities in order to allow for the transfer of a large majority of the French tax losses carried forward of the existing PSA French tax consolidated group to the French permanent establishment of Stellantis and for the carry-forward of French tax losses transferred to the French permanent establishment of Stellantis against future profits of the French permanent establishment of Stellantis and certain companies of the existing PSA French tax consolidated group.

Whether or not the merger is completed, pursuant to the combination agreement, each party will bear its own financial, accounting and other costs in connection with the merger and the other transactions contemplated by the combination agreement, except that the parties will share equally in any material filing or similar fees in connection with any governmental or self-regulatory review, registration, approval, permit or license, stock exchange listing or similar requirements with respect to the merger and the other transactions contemplated by the combination agreement.

The combination agreement provides that before the merger may be completed, any waiting period (or extension of such waiting period) applicable to the merger must have expired or been terminated, and any competition approvals, consents or clearances required in connection with the merger must have been received, in each case, under the applicable antitrust laws of the European Union, under the HSR Act, and under the competition laws of the Federative Republic of Brazil, the Republic of Chile, the United Mexican States, the People’s Republic of China, Japan, the Republic of India, the Republic of South Africa, the Kingdom of Morocco, Israel, the Swiss Confederation, Ukraine, the Russian Federation, the Republic of Serbia and the Republic of Turkey. The consummation of the merger might be delayed due to the time required to fulfill the requests for information by the relevant regulatory authorities. In addition, in certain jurisdictions, there can be unforeseen or other extensions of deadlines by the relevant antitrust authorities for the review of the merger. Such extensions are more likely to happen in the context of the current COVID-19 crisis. The terms and conditions of any antitrust approvals, consents and clearances that are ultimately granted may impose conditions, terms, obligations or restrictions on the conduct of Stellantis’s business.

FCA and PSA are obligated under the combination agreement to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their part to consummate and make effective the merger and the other transactions contemplated by the combination agreement as soon as reasonably practicable after the date of the combination agreement, including the relevant competition approvals and to offer and comply with such commitments to the relevant regulatory authorities as would be necessary to enable the regulatory authorities to grant such competition approvals. As an exception to the foregoing, neither FCA nor PSA may, without the consent of the other party, offer or comply with any commitments or take any action (i) with respect to any assets, businesses or interests other than those of Stellantis, FCA, PSA or their respective subsidiaries and non-consolidated joint ventures; (ii) if any such commitment or action, individually or in the aggregate, would, or would reasonably be expected to, result in a substantial detriment to the combined group; or (iii) unless any such commitment or action is conditioned upon the consummation of the merger and the other transactions contemplated by the combination agreement.

As of the date of this prospectus and as set out in more detail below, competition approvals have been obtained in ten jurisdictions including in the People’s Republic of China, the Republic of India, Japan, the Republic of South Africa, Israel, the Republic of Serbia, the Kingdom of Morocco, the Swiss Confederation, the United Mexican States and the Federative Republic of Brazil. As of the date of this prospectus, the review of the merger by antitrust authorities is ongoing in six jurisdictions including the United States of America, the European Union, the Republic of Chile, the Russian Federation, the Republic of Turkey and Ukraine. The parties have also made a notification in respect of the merger in the Argentine Republic, where the review of the merger is ongoing, but the merger control regime is currently non-suspensory. With respect to the People’s Democratic Republic of Algeria, FCA and PSA have determined that antitrust approval from the competition authority will not be required in this jurisdiction and, pursuant to the combination agreement amendment, agreed to exclude such jurisdiction from those whose approval is a condition precedent to the consummation of the merger. In addition, the period during which an EU member state (or the United Kingdom) can request a referral of the merger has expired and, therefore, the merger will not be subject to the review by a national competition authority of an EU member state (or the United Kingdom).

In the Republic of India, the notification of the merger to the Competition Commission of India was submitted on April 15, 2020 and unconditional clearance was granted on June 4, 2020.

In Japan, the notification of the merger to the Japan Fair Trade Commission was submitted on April 17, 2020 and unconditional clearance was granted on May 8, 2020.

In the Republic of South Africa, the notification of the merger to the Competition Commission in South Africa was submitted on February 19, 2020 and conditional clearance was granted on April 28, 2020. The Competition Commission approved the transaction subject to certain employment conditions providing that the combined group will not retrench any employees in South Africa as a result of the merger for a period of two years after closing.

In Israel, the notification of the merger to the Israel Competition Authority was submitted on January 23, 2020 and unconditional clearance was granted on March 11, 2020.

In the Republic of Serbia, the notification of the merger to the Commission for Protection of Competition was submitted on February 28, 2020 and unconditional clearance was granted on May 26, 2020.

In the Swiss Confederation, the notification of the merger to the Secretariat of the Competition Commission was submitted on May 11, 2020 and unconditional clearance was granted on June 9, 2020.

As of the date of this prospectus, the review of the merger by the European Commission is ongoing. The Form CO for notifying the European Commission of the merger was submitted formally on May 8, 2020. The Phase 1 review period is 25 business days from formal submission of the Form CO and is extendable by ten additional business days if a remedy is proposed in Phase 1 or if an EU member state (or the United Kingdom) requests referral of the merger for review by its national competition authority. As indicated above, the period during which an EU member state (or the United Kingdom) can request a referral of the transaction has expired and, therefore, the merger will not be subject to review by any national competition authority of an EU member state (or the United Kingdom). In addition, on June 4, 2020, FCA and PSA informed the European Commission that they do not intend to propose a remedy in Phase 1. On June 17, 2020, the European Commission adopted a decision triggering a Phase 2 investigation.

The Phase 2 review period is 90 business days from the decision of the European Commission to initiate proceedings and is extendable by (i) 15 additional business days if remedies are offered by the notifying parties between 55 to 65 business days since the inception of Phase 2, and (ii) by up to 20 additional business days with the consent of the notifying parties. On July 3, 2020, following agreement with FCA and PSA, the European Commission extended the period within which to complete its Phase 2 investigation by 15 business days. On July 20, 2020, the European Commission suspended the review period because it determined that it requires further information from the parties. The suspension of the review period ended on September 28, 2020. On September 25, 2020, the parties submitted commitments to the European Commission.

In response to the COVID-19 crisis, the CNDC has suspended all deadlines until October 25, 2020, without prejudice to the validity of the acts that were already carried out. As a result of this suspension, the statutory review period commenced on October 26, 2020.

The HSR filings relating to the merger were submitted to the U.S. Federal Trade Commission and the U.S. Department of Justice Antitrust Division on April 10, 2020 and the HSR waiting period expired on May 11, 2020. Following the entry into the combination agreement amendment on September 14, 2020, the Staff of the U.S. Federal Trade Commission advised that new filings are required to be submitted as a result of the revised terms of the merger. These filings were submitted on October 7, 2020, and triggered a waiting period of 30 calendar days.

On June 26, 2020, the FNE opened a Phase 2 investigation. The Phase 2 review period is of up to 90 additional business days. The FNE and the notifying parties can agree to suspend the review periods once for up to 30 business days during Phase 1 and up to 60 business days during Phase 2. If the notifying parties offer remedies, the procedure is suspended for up to ten business days during Phase 1 and up to 15 business days during Phase 2. The legal maximum total review period is 130 business days (approximately seven months), excluding pre-notification and any suspensions of the review periods. If the FNE does not issue a decision within the relevant review period (Phase 1 or Phase 2, including extensions), the merger will be deemed approved. On October 7, 2020, the parties submitted remedies to the FNE, which suspended the review period by 15 business days.

In response to the COVID-19 crisis, the FNE continues to accept and review notifications but has requested that notifying parties limit notifications to urgent and essential ones.

In the Republic of Turkey, the review of the merger by the Turkish Competition Authority (“TCA”) is ongoing. The notification of the merger was submitted on February 21, 2020. The Phase 1 review period is up to 30 calendar days from formal notification. The TCA can re-start the Phase 1 review period by issuing a request for information. Following multiple requests for information issued in Phase 1, which restarted the statutory review period, the TCA opened a Phase 2 investigation by a decision dated July 17, 2020.

The Phase 2 review period is of up to six calendar months from July 17, 2020, extendable by up to six additional calendar months at the discretion of the TCA. This period may be followed by a maximum of two written responses by the notifying parties and a final oral hearing before the competition board (the deciding organ of the TCA) until the adoption of the final decision of the competition board. The maximum total review period under normal conditions is approximately 21 calendar months, excluding the re-starts of the Phase 1 review.

Notwithstanding the COVID-19 crisis, the TCA is still accepting and reviewing notifications according to the pre-existing statutory procedures. There have been no announcements about delays or extensions.

Following the entry into the combination agreement amendment, the parties have determined that a new notification is required, which was submitted to the FAS on October 13, 2020. The Phase 1 review period is up to 30 calendar days from formal notification. The Phase 2 review period is up to an additional two calendar months. The FAS can extend the total review period to up to nine calendar months if the parties are ordered to fulfill certain conditions defined by the FAS.

In Ukraine, the review of the merger by the Anti-Monopoly Committee (“AMC”) is ongoing. The notification of the merger was submitted on February 13, 2020. The pre-review period is of up to 15 calendar days. The Phase 1 review period is of up to 30 additional calendar days. The AMC cannot suspend the review period during Phase 1. On March 27, 2020, the AMC opened a Phase 2 investigation. The Phase 2 review period is of up to 135 calendar days from the day on which the Phase 2 notice is sent to the parties, unless the parties request the AMC to prolong such period due to the necessity to submit additional information. The deadline of the Phase 2 review under Ukrainian law was August 12, 2020. However, given that the AMC provided additional requests for information and the parties agreed to provide their response to such requests, the review period is extended until the AMC has enough information to make its decision.

Notwithstanding the COVID-19 crisis, the AMC is still accepting and reviewing notifications according to the pre-existing statutory procedures. There have been no announcements about delays or extensions.

On May 15, 2020, the parties submitted a joint voluntary notice (“Notice”) to the Committee on Foreign Investment in the United States (“CFIUS”) regarding the merger. CFIUS formally accepted the Notice and began its review of the merger on June 9, 2020.

On September 4, 2020, CFIUS approved the merger.

In connection with the merger, certain regulatory approvals are required with respect to the regulated finance activities of FCA and PSA. The French and German prudential regulators have acknowledged completeness of the filings submitted in France and Germany by FCA and PSA. FCA and PSA expect that the Italian prudential regulator will acknowledge completeness of the filing submitted in Italy in November, with the non-opposition decision by the ECB as well as the regulators in Germany, Italy and France expected in December. Regulatory approvals have been obtained thus far in the United Kingdom, the Republic of Malta, the Russian Federation, the Kingdom of Belgium, the Federative Republic of Brazil, the Kingdom of Spain and the Grand Duchy of Luxembourg.

The FCA common shares issued as part of the merger and represented by the book-entry positions referred to below, will be issued and allotted to Cede & Co, as nominee for DTC, for inclusion in the centralized depository and clearing systems of DTC and Euroclear France, and ultimately, directly or indirectly, on behalf and for the benefit of the former holders of PSA ordinary shares.

Each book-entry position previously representing PSA ordinary shares (other than any PSA ordinary shares held in treasury by PSA or by FCA, if any (collectively, the “excluded PSA shares”)), which includes all PSA ordinary shares (other than any excluded PSA shares) held in:

will following the implementation of the merger be exchanged for book-entry positions representing FCA common shares issued and allotted in accordance with the Exchange Ratio, provided that:

Depending on each PSA shareholder’s custodian/depository, the book-entry positions representing FCA common shares should be visible in the securities accounts of the PSA shareholders between the first business day following the Effective Time and the effective delivery date of the positions in Euroclear France (which is expected to be the third business day after the Effective Time).

Each excluded PSA share, if any, will be cancelled by operation of law in accordance with Article 2:325(4) of the Dutch Civil Code and no consideration will be delivered in exchange for such excluded PSA share.

Following implementation of the merger, any holder of FCA common shares registered in the name of Cede & Co, as nominee for DTC, and included in the centralized depository and clearing systems of DTC and Euroclear France is entitled to request, through its intermediary for such FCA common shares, to be registered in its own name in FCA’s shareholders’ register, provided that such FCA common shares will no longer be included in the centralized depository and clearing systems of DTC and Euroclear France and may no longer be traded on Euronext Paris.

The combination agreement was entered into by FCA and PSA on December 17, 2019 and subsequently amended by the parties on September 14, 2020. In addition, certain shareholders of FCA and PSA have made undertakings to support the merger and, among other things, vote their shares in favor of the merger at the respective extraordinary general meetings of shareholders.

If the merger is approved by the requisite votes of the FCA shareholders and the PSA shareholders and the other conditions precedent to the merger are satisfied or, to the extent permitted under the combination agreement and by applicable law, waived, PSA will be merged with and into FCA, which will be renamed “Stellantis N.V.” on the day immediately following the date on which the closing of the merger occurs.

The merger will be effective at the Effective Time (00:00 a.m. Central European Time on the first day after the date on which a Dutch civil law notary executes a notarial deed of cross-border merger with respect to the merger between FCA and PSA in accordance with applicable Dutch law and French law (the “Merger Deed”)), at which Effective Time, the separate corporate existence of PSA will cease, and FCA will continue as the sole surviving corporation, and, by operation of law, FCA, as successor to PSA, will succeed to and assume all of the rights and obligations and other legal relationships, as well as the assets and liabilities, of PSA in accordance with Dutch law and French law. FCA will be renamed Stellantis at the Governance Effective Time. Pursuant to the combination agreement (and subject to applicable Dutch law and French law), the merger will be deemed to enter into effect retroactively as from the first day of the calendar year during which the Effective Time occurs (the “Retroactive Effective Date”), so that (i) Stellantis will be deemed to have had the use of all the assets of PSA as from the Retroactive Effective Date, (ii) all transactions of PSA as from the Retroactive Effective Date will be treated as being those of Stellantis, and (iii) all of the profits and losses derived from such transactions for the period starting as from the Retroactive Effective Date will be deemed realized by Stellantis.

At the Effective Time, by virtue of the merger and without any action on the part of any holder of PSA ordinary shares or FCA common shares, FCA will issue for each outstanding PSA ordinary share (other than any PSA ordinary share held in treasury by PSA or held by FCA, if any) 1.742 FCA common shares, the PSA ordinary shares will no longer be outstanding and automatically cease to exist and each issued and outstanding common share of FCA will remain unchanged as one common share in FCA.

In the event that, between the date of the combination agreement and the Effective Time, the outstanding PSA ordinary shares or FCA common shares change into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination, consolidation or exchange of shares, or any similar event will have occurred, then any number or amount contemplated in the combination agreement (including the Exchange Ratio) which is based upon the number of PSA ordinary shares or FCA common shares, as the case may be, will be appropriately adjusted to provide to the shareholders of both PSA and FCA the same economic effect as contemplated by the combination agreement prior to such event.

In the event where the number of FCA common shares to be issued upon the merger calculated in accordance with the Exchange Ratio would not be a rounded number, the total number of issued and allotted FCA common shares would be rounded down to the nearest full number and any fractional entitlement would be paid in cash, such cash amount to be calculated based on the stock market quotation upon the closing of the market of the FCA common shares on the last trading day before the day on which a Dutch civil law notary executes the Dutch notarial deed of cross-border merger to effect the merger.

At the Effective Time, each outstanding warrant with respect to PSA ordinary shares will, except to the extent they have been cancelled prior to the Effective Time, automatically and without any required action on the part of the holder of such warrant, cease to represent an equity warrant giving entitlement to subscribe for PSA ordinary shares and will be converted into one equity warrant giving entitlement to subscribe for a number of FCA common shares equal to the exercise ratio of the outstanding warrants with respect to PSA ordinary shares in effect immediately prior to the Effective Time, multiplied by the Exchange Ratio at an exercise price per equity warrant with respect to FCA common shares equal to one euro. Following the Effective Time, each such warrant will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to it immediately prior to the Effective Time.

Following the Effective Time, each outstanding FCA performance share unit and outstanding FCA restricted share unit under the FCA equity incentive plan will continue to be governed by the same terms and conditions (including service-based vesting terms, but not performance-based vesting conditions, which will be eliminated) as were applicable to such FCA equity award immediately prior to the Effective Time. In determining the number of FCA ordinary shares underlying each outstanding FCA performance share unit, performance conditions will be deemed satisfied at target level or, in the event that FCA’s performance exceeds the target level, as assessed by the FCA Board or a committee of the FCA Board immediately before the Effective Time, at that assessed level.

Each of FCA and PSA made representations and warranties to the other, including in particular the following:

Many of the representations and warranties in the combination agreement made by each of FCA and PSA are qualified as to “materiality” or “Material Adverse Effect.” For purposes of the combination agreement, a “Material Adverse Effect” with respect to FCA or PSA means any facts, circumstances, changes, events or developments (including any material worsening of any existing fact, circumstance or event) which may occur from the date of the combination agreement that, individually or in the aggregate, materially adversely affect (or is reasonably likely to materially adversely affect) the business, financial condition or results of operations, taken as a whole, of the FCA Group (as defined in the combination agreement) or the PSA Group (as defined in the combination agreement) (or in each case the Combined Group (as defined in the combination agreement)), respectively; provided that the following, alone or in combination, will not in and of itself or themselves constitute a Material Adverse Effect: (A) any change or development in general economic or regulatory, legislative or political conditions or securities, credit, financial or other capital markets conditions, in each case in any jurisdiction; (B) any change or development affecting the global automotive industry generally; (C) any change or development to the extent resulting from any failure of the FCA Group, the PSA Group or the Combined Group, respectively, to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period (it being understood that the facts and circumstances giving rise to such failure may be deemed to constitute, and may be taken into account in determining whether there has been, a Material Adverse Effect); (D) any change in the market price, credit rating (with respect to such party or its securities) or trading volume of such party’s securities (it being understood that the facts and circumstances giving rise to such change may be deemed to constitute, and may be taken into account in determining whether there has been, a Material Adverse Effect); (E) any change in applicable law, regulation or IFRS (or any authoritative interpretation of such applicable law, regulation or IFRS) of general applicability; (F) geopolitical conditions, the outbreak or escalation of hostilities, any acts of war (whether or not declared) or terrorism, or any escalation or worsening of any such acts of war or terrorism threatened or underway as of the date of the combination agreement; or (G) any hurricane, tornado, flood, earthquake or other weather or natural disaster; provided, further, that, with respect to clauses (A), (B), (E), (F) and (G), such change or development will be taken into account in determining whether a Material Adverse Effect has occurred or is reasonably likely to occur to the extent (and only to the extent) it disproportionately affects the FCA Group or the PSA Group (or in each case the Combined Group), respectively. Pursuant to the combination agreement amendment, each of FCA and PSA agreed that any reference to a “Material Adverse Effect” in the combination agreement will take into account facts and circumstances occurring or existing subsequent to the date of the combination agreement amendment, and prior to the date of the combination agreement amendment only to the extent to which a party invoking a Material Adverse Effect had not received notice of and was not otherwise aware of such facts or circumstances on or prior to the date of the combination agreement amendment.

Pursuant to the combination agreement amendment, each of FCA and PSA confirmed than no facts or circumstances occurring or existing on or prior to the date of the combination agreement amendment of which it was aware on or prior to such date will give rise to a claim of breach of any representation, warranty or covenant under the combination agreement. Each of FCA and PSA ratified any actions taken or failed to be taken by the other party, notice of which has been given or of which it is otherwise aware prior to the date of the combination agreement amendment.

Under the combination agreement, each of FCA and PSA has agreed that, subject to certain exceptions agreed between the parties, from the date of the combination agreement until the Effective Time, FCA and PSA will (i) conduct their respective activities in all material respects in the ordinary course of business consistent with past practice (the “ordinary course”), (ii) use their commercially reasonable efforts to preserve intact their business organizations and maintain in all material respects their relationships with material customers, suppliers and others having significant business dealings with them, and (iii) not take any action that would reasonably be likely to cause any of their respective representations and warranties in the combination agreement to be untrue in any material respect as of any date any such representations and warranties are made or deemed to be made, or prevent, impair or materially delay the consummation of the merger and the other transactions contemplated by the combination agreement.

Subject to certain exceptions agreed between FCA and PSA (including the Pre-Merger Distributions and the preparation of the Comau Separation (each as defined and described below)) from the date of the combination agreement until the Effective Time, without the prior written consent of the other party (which will not be unreasonably withheld, delayed or conditioned), except as otherwise expressly contemplated by the combination agreement, as required by applicable law or publicly announced by such party before the date of the combination agreement (other than with respect to the Comau Separation), each party will not and will not permit its subsidiaries to, among other things:

The foregoing restrictions do not apply to Faurecia (in respect of PSA), provided that PSA has agreed to use commercially reasonable efforts to avoid any action by Faurecia that could reasonably be expected to result in a breach of such covenants.

FCA and PSA each have agreed to take certain actions between the date of the combination agreement and the Effective Time and following the Effective Time. Among other things, FCA and PSA have undertaken as follows:

FCA and PSA will cause the Stellantis common shares, including the common shares issued in the merger, to be approved for listing on the NYSE, Euronext Paris and the MTA.

Prior to the Effective Time (i) the FCA Extraordinary Dividend may be declared by FCA to be paid to its shareholders (with a record date prior to the closing of the merger, and which will be paid to such shareholders of record on a payment date as soon as practicable after the closing of the merger), (ii) an ordinary dividend for an amount of €1.1 billion (or a lower amount that represents the lowest maximum distributable amount of either party) (the “2019 Ordinary Dividend”) in respect of the fiscal year ending December 31, 2019 may be paid by each of FCA and PSA, and (iii) if the closing of the merger has not occurred before the 2021 annual general meetings of PSA and FCA, an ordinary dividend (together with the FCA Extraordinary Dividend and the 2019 Ordinary Dividend, the “Pre-Merger Distributions”) in respect of the fiscal year ending December 31, 2020 for an amount to be agreed by FCA and PSA on the basis of their respective distributable amounts, may be paid by each of PSA and FCA. On May 13, 2020 the parties decided that, in light of the impact of the COVID-19 crisis, neither FCA nor PSA will pay an ordinary dividend in 2020 relating to the fiscal year 2019. Pursuant to the combination agreement amendment, the parties agreed that the amount of the FCA Extraordinary Dividend would be reduced to €2.9 billion (from €5.5 billion, as was provided in the original combination agreement).

Following agreement between PSA and FCA, on October 29, 2020, PSA sold 9,663,000 ordinary shares of Faurecia, representing approximately seven percent of the share capital of Faurecia with proceeds of approximately €308 million. FCA and PSA intend that, promptly following the Effective Time, Stellantis will distribute to its shareholders through a dividend or other form of distribution (including through a reduction of the share capital of Stellantis) (i) its remaining Faurecia ordinary shares, representing approximately 39 percent of the share capital of Faurecia, and (ii) cash equal to the proceeds of the sale of the Faurecia ordinary shares described above, subject to any corporate approvals required in relation thereto (including the prior approval of the Stellantis Board and the Stellantis shareholders), which will be sought promptly following the closing of the merger. PSA has undertaken (i) to convert, prior to the closing, the manner in which it holds its remaining Faurecia ordinary shares, resulting in the loss of the double voting rights attached to such Faurecia ordinary shares and (ii) to cause its representatives on the board of directors of Faurecia to resign effective the day preceding the Effective Time, which will collectively eliminate PSA’s influence over Faurecia and result in a loss of control prior to the Effective Time. FCA and PSA have also undertaken that Stellantis will not exercise control over Faurecia following the closing of the merger. PSA has agreed that prior to the closing of the merger there will be no material changes in any currently existing commercial arrangements between PSA and Faurecia, other than amendments in the ordinary course, and that it will not effect the Faurecia Distribution prior to the closing of the merger. The parties will, prior to the closing of the merger, work diligently to prepare for the Faurecia Distribution in order to enable the Faurecia Distribution to be completed promptly following the closing of the merger, including by making any filings, seeking any consents, authorizations or other permits as necessary or desirable with respect to the Faurecia Distribution (but in all events subject to the aforementioned corporate approvals).

Promptly following the Effective Time, Stellantis is permitted to allocate to its shareholders through a demerger or similar transaction all the shares held by Stellantis in Comau or implement other value-creating alternative structures, including the sale of all the shares held by Stellantis in Comau (each of such transactions, the “Comau Separation”). FCA will, prior to the closing of the merger, work diligently to prepare for the Comau Separation to enable the Comau Separation to be completed promptly following the closing of the merger, including by establishing the perimeter, capital structure and governance of Comau in consultation with PSA and, if applicable, preparing all necessary documentation for the listing of Comau shares on the appropriate securities exchange.

Pursuant to the combination agreement amendment, FCA and PSA have agreed that PSA will review with the PSA Managing Board and the PSA Supervisory Board and FCA will review with the FCA Board a potential distribution of €500 million to be paid by each party to its shareholders prior to the closing of the merger, but solely if such distribution is paid by both parties, or, in the alternative, a potential cash distribution of €1.0 billion to be paid by Stellantis to its shareholders following the closing of the merger.

FCA and PSA have agreed to coordinate between the date of the combination agreement and the closing of the merger regarding the issuance of equity or other long-term incentive awards, with the intent that any awards granted will be consistent, including with respect to value, with awards granted by FCA and PSA in the ordinary course prior to the date of the combination agreement.

Pursuant to the combination agreement, other than with respect to the ECB Clearance (as defined below) each of FCA and PSA agreed to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on its part to consummate and make effective the merger and the other transactions contemplated by the combination agreement as soon as reasonably practicable after the date of the combination agreement, including (i) preparing and filing as promptly as practicable all documentation to effect all necessary notices, reports and other filings and to obtain as promptly as practicable all consents, registrations, approvals, authorizations and other permits (including the required approvals from the relevant antitrust authorities (the “Competition Approvals”)) (collectively, the “Consents”) necessary to be obtained (if any) in order to consummate the merger and the other transactions contemplated by the combination agreement, (ii) offering and complying with such commitments to the relevant regulatory authorities as would be necessary to enable the regulatory authorities to grant the Consents, and (iii) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by the combination agreement and to fully carry out the purposes of the combination agreement; provided that such undertakings will not require FCA or PSA to, and neither FCA nor PSA may, without the consent of the other party, offer or comply with any commitment to any person, governmental entity or self-regulatory organization, or take any action (i) with respect to any assets, businesses or interests other than those of Stellantis, FCA, PSA or their respective subsidiaries and non-consolidated joint ventures; (ii) if any such commitment or action, individually or in the aggregate, would, or would reasonably be expected to, result in a Substantial Detriment (as defined below); or (iii) without limiting clause (ii) above, unless any such commitment or action is conditioned on the consummation of the merger and the other transactions contemplated by the combination agreement. For purposes of the combination agreement, a “Substantial Detriment” means, individually or in the aggregate, a material adverse impact (or a reasonably likely material adverse impact) on the value of the Combined Group after the closing of the merger (taking into account the parties’ contemplated plans for combining the businesses of PSA and FCA after the closing of the merger and the value reasonably expected to be realized in connection with the merger) or the imposition (or the reasonably likely imposition) of criminal penalties or sanctions.

Pursuant to the combination agreement amendment, FCA and PSA agreed to take or cause to be taken any and all actions necessary, proper or advisable in light of such amendment to obtain or confirm, to the extent necessary, all Consents, including those obtained prior to the date of the combination agreement amendment required in order to consummate the merger and the other transactions contemplated by the combination agreement.

In connection with the obtaining of the approval of the merger and the other transactions contemplated by the combination agreement from the European Central Bank (the “ECB Clearance”), FCA and PSA agreed pursuant to the combination agreement to cooperate with each other and take (and cause their respective subsidiaries to take) or cause to be taken all actions, and do or cause to be done, as promptly as practicable, all things, necessary, proper or advisable under the combination agreement and applicable law, including:

The combination agreement contains certain other covenants and agreements, including covenants relating to, among other matters:

Pursuant to the combination agreement, each of FCA and PSA agreed, subject to certain limitations set forth in the combination agreement, that, from and after the date of the combination agreement until the earlier of the closing of the merger and the termination of the combination agreement, neither it nor any of its subsidiaries nor any of their respective officers, directors or employees may, and each of them will instruct and cause its and its subsidiaries’ representatives not to, directly or indirectly:

Notwithstanding the foregoing, if at any time following the date of the combination agreement in the case of FCA, prior to the receipt of the FCA Shareholders Approval and in the case of PSA, prior to the receipt of the PSA Shareholders Approval:

For purposes of the combination agreement, “Acquisition Proposal”, with respect to FCA or PSA, as applicable, means any offer or proposal for, or any indication of interest in:

Neither the FCA Board nor the PSA Supervisory Board will be entitled to effect a Change in Recommendation unless the party that intends to take such action has provided the other party with a written notice to that effect (the “Change in Recommendation Notice”), which notice includes, as applicable, an un-redacted copy of the Superior Proposal that is the basis of such action (including the identity of the person making the Superior Proposal). During the five business day period following the receipt of the Change in Recommendation Notice, the notifying party will, and will cause its representatives to, negotiate with the other party in good faith (to the extent such other party desires to negotiate) to make such adjustments in the terms and conditions of the combination agreement so that such Superior Proposal ceases to constitute a Superior Proposal; and following the end of the five business day period, the board of the notifying party will determine in good faith, taking into account any changes to the combination agreement proposed in writing by the other party in response to the Change in Recommendation Notice or otherwise, whether the Superior Proposal giving rise to the Change in Recommendation Notice continues to constitute a Superior Proposal. Any amendment to the financial terms or any other material amendment of such Superior Proposal will require a new Change in Recommendation Notice and the party intending to make a Change in Recommendation will be required to comply again with the requirements and procedure described in the combination agreement; provided, however, that for purposes of this sentence, references to the five business day period above will be deemed to be references to a three business day period.

Each party is entitled to terminate the combination agreement in the event of a Change in Recommendation of the other party and upon such termination the party terminating the agreement will be entitled to the payment by the other party of a termination fee in an amount of €500 million.

The combination agreement provides for certain arrangements relating to the governance of Stellantis, including causing Stellantis to adopt, as of the Governance Effective Time, new articles of association (“Stellantis Articles of Association”), board regulations (“Stellantis Board Regulations”) and a loyalty voting program in agreed form. The principal terms of such governance arrangements are summarized below.

After the Governance Effective Time the board of directors of Stellantis (the “Stellantis Board”) will be a single-tier board and initially composed of 11 members, including the following initial directors as of the day immediately following the date on which the merger occurs:

Pursuant to Stellantis Board Regulations, each director will have one vote and no director will have a casting vote on any decision.

For these purposes, “Independent Director” means a director meeting the independence requirements under the Dutch Corporate Governance Code and, with respect to members of the Audit Committee, also meeting the independence requirements of Rule 10A-3 under the Exchange Act, and the NYSE listing requirements.

Additionally, the parties agreed that Stellantis will follow the Dutch Corporate Governance Code and applicable international best practices (except, in each case, as otherwise agreed by the parties), and will ensure that (i) a majority of the non-executive members of the Stellantis Board qualifies as Independent Directors, and (ii) the members of the Stellantis Board have appropriate diversity in expertise, geography and gender.

The rights of Exor, EPF/FFP and BPI (each a “Nominating Shareholder”) to nominate the number of directors mentioned above also apply to future terms of office of the Stellantis Board; provided that:

As an exception to the foregoing paragraph, if, at the closing of the merger or at any time within the six years following the closing of the merger:

the Nominating Shareholder which holds the Threshold Stake will maintain its right to nominate a director to the Stellantis Board until the sixth (6th) anniversary of the closing of the merger (it being understood that while BPI is entitled to nominate a director pursuant to this exception, EPF/FFP will not be entitled to nominate the EPF/FFP Additional Director).

Additionally, Exor’s right to nominate directors will decrease in the event Exor and/or its affiliates reduce their equity ownership in Stellantis as follows:

In such cases, the director designated by Exor for resignation from among the directors nominated by Exor will be required to resign as promptly as reasonably practicable after the number of Stellantis common shares held by Exor and/or its affiliates falls below the applicable threshold.

Any event or series of events (including any issue of new shares) other than a transfer (including transfer under universal title) of PSA ordinary shares or Stellantis common shares will be disregarded for the purpose of determining whether the applicable Nominating Shareholder reaches the relevant threshold(s).

The combination agreement provides that the following positions will be filled by the following individuals from the day immediately following the date on which the closing of the merger occurs:

The initial term of office of each of the Chairman, CEO, Senior Independent Director and Vice Chairman will be five years, in each case beginning on the day immediately following the date on which the closing of the merger occurs. The initial term of office for each of the other directors will be four years. Mr. Elkann and Mr. Tavares will be the only executive directors. Following the initial term, the members of the Stellantis Board will be elected for successive two-year terms.

In addition to his/her powers set out in Stellantis Articles of Association and Stellantis Board Regulations, including the power to convene the Stellantis Board and the general meetings of Stellantis, the CEO will be responsible for the management of Stellantis in accordance with the Dutch Civil Code and will be vested with full authority to represent Stellantis individually.

The combination agreement provides that under Stellantis Articles of Association no shareholder, acting alone or in concert, together with votes exercised by affiliates of such shareholder or pursuant to proxies or other arrangements conferring the right to vote, may cast 30 percent (the “Voting Threshold”) or more of the votes that could be cast at any general meeting of shareholders of Stellantis, including after giving effect to any voting rights exercisable through Stellantis special voting shares. Any voting right in excess of the Voting Threshold will be suspended. Furthermore, Stellantis Articles of Association will provide that, before each general meeting, any shareholder holding voting rights in excess of the Voting Threshold is required to notify Stellantis, in writing, of its shareholding and total voting rights in Stellantis and provide, upon written request by Stellantis, any information necessary to ascertain the composition, nature and size of the equity interest of that person and any other person acting in concert with it. The Voting Threshold restriction (i) may be removed following a resolution passed to that effect at a meeting of Stellantis shareholders with a majority of at least two-thirds of the votes cast (for the avoidance of doubt, without giving effect to any voting rights exercisable through Stellantis special voting shares, and subject to the Voting Threshold), and (ii) will lapse upon any person holding more than 50 percent of the issued Stellantis common shares (other than Stellantis special voting shares) as a result of a public offer for Stellantis common shares.

Each of the Reference Shareholders, in its capacity as shareholder of PSA or FCA, as applicable, has entered into a letter agreement (a “Letter Agreement”) with PSA or FCA, as applicable, setting forth, among other things, the following undertakings relating to the merger and the future governance of Stellantis:

Each Reference Shareholder has undertaken pursuant to its Letter Agreement to:

In addition, each Reference Shareholder has undertaken pursuant to its Letter Agreement (i) not to solicit, initiate or encourage any Acquisition Proposal or enter into, continue or participate in any discussions or negotiations with a third party regarding any Acquisition Proposal, (ii) to cease and cause to be terminated the participation of any of its representatives in all discussions or negotiations with any person conducted prior the date of the relevant Letter Agreement with respect to any proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal and (iii) not to accept, approve, recommend or enter into any agreement, in respect of an Acquisition Proposal.

Pursuant to the Letter Agreements, each Reference Shareholder will be restricted from buying shares to increase its interest in PSA, FCA (before the merger) or Stellantis for a period ending seven years following the Effective Time, except that EPF/FFP may increase its shareholding in Stellantis by up to a maximum of 2.5 percent of the Stellantis share capital (or five percent of the PSA share capital) by acquiring shares from BPI and/or Dongfeng and/or on the market, provided that market acquisitions may not represent more than one percent of the Stellantis common shares or two percent of the PSA ordinary shares plus, if applicable, the percentage of Stellantis common shares (or PSA ordinary shares) sold by BPI to any buyers other than EPF/FFP or any of its affiliates.

After the closing of the merger, each Reference Shareholder may be released from its respective standstill obligation with respect to Stellantis common shares with the consent of the Stellantis Board, provided that, other than with regard to Dongfeng (that will be released if and to the extent any other Reference Shareholder is so released), such consent will not be adopted without the favorable vote of each of the directors nominated by the other Reference Shareholders that remain bound by their undertakings pursuant to their respective Letter Agreements.

After the closing of the merger, Stellantis agrees to release each Reference Shareholder from its respective standstill obligation in the event (a) the Stellantis Board recommends a transaction in which a person or group would acquire 50 percent or more of Stellantis common shares (including a merger of Stellantis with or into another entity unless the shareholders of Stellantis immediately prior to the merger are entitled to receive more than the majority of the ordinary share capital and voting rights in the surviving entity of the merger), or (b) a person or group not acting in concert with the relevant Reference Shareholder formally files an offer to acquire 50 percent or more of the outstanding Stellantis common shares by means of a tender or exchange offer.

After the closing of the merger, Stellantis agrees to release each Reference Shareholder (other than Dongfeng) from its respective lock-up obligation in the event the Stellantis Board recommends a transaction in which a person or group would acquire 50 percent or more of the Stellantis common shares (including a merger of Stellantis with or into another entity unless the shareholders of Stellantis immediately prior to the merger are entitled to receive more than the majority of the share capital and voting rights in the surviving entity of the merger).

In connection with the entry by FCA and PSA into the combination agreement amendment, each of the Reference Shareholders, in its capacity as shareholder of FCA or PSA, as applicable, has entered into a letter agreement with FCA or PSA, as applicable. Pursuant to such letter agreements, from the date of the combination agreement amendment until the date which is 180 days after the completion of the Faurecia Distribution, each Reference Shareholder and their respective affiliates will be subject to a lock-up in respect of their shareholdings in Faurecia. Such restriction will not apply to any transfer of Faurecia shares to another Reference Shareholder or pursuant to any tender offer for the shares of Faurecia or any merger of Faurecia with any other entity or similar transaction.

The obligation of each party to effect the merger is subject to the satisfaction or waiver (by both parties, to the extent permitted by applicable law) of the following closing conditions:

With respect to most of these conditions, the closing of the merger without satisfying such conditions would either be impossible or give rise to penalties or other sanctions. For example, the merger cannot close unless it is approved by the FCA shareholders and the PSA shareholders, and closing the merger without Competition Approvals would, in most cases, be a violation of applicable law. Therefore, it would be impossible or unlikely as a practical matter that the parties would be in a position to waive satisfaction of those conditions.

The combination agreement provides that the employees of each of FCA, PSA and their respective subsidiaries at the closing of the merger who continue to remain employed with Stellantis, will, during the period commencing at the closing of the merger and ending on December 31, 2021, be provided with a base salary, severance benefit protections and pension and welfare benefits that are no less favorable, in the aggregate, than those provided to employees of FCA, PSA and their respective subsidiaries, as applicable, immediately prior to the closing of the merger. On June 25, 2020, PSA’s shareholders meeting decided, in accordance with applicable law, to waive the setting up of, and negotiation with, the special negotiating body required under EU law, as contemplated by the combination agreement. Pursuant to the combination agreement, FCA intends that the extraordinary general meeting of the FCA shareholders will decide, in accordance with applicable law, to waive the setting up of, and negotiation with, the special negotiating body required under EU law.

The combination agreement provides that, from and after the closing of the merger, Stellantis will indemnify and hold harmless each present and former director and officer of each party to the merger or any of its subsidiaries (in each case, when acting in such capacity), determined as of the closing of the merger (the “Indemnified Parties”), against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of matters existing or occurring at or prior to the closing of the merger and related to their respective roles as director of officer of the relevant party or its relevant subsidiary, whether asserted or claimed prior to, at or after the closing; provided that the person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification.

Prior to the closing of the merger, each party to the combination agreement will (and if such party is unable to, Stellantis will) effective as of the Effective Time, obtain and fully pay for “tail” insurance policies with a claims period of at least six years from and after the closing of the merger from an insurance carrier with the same or better credit rating as such party’s insurance carrier as of the date of the combination agreement with respect to directors’ and officers’ liability insurance and fiduciary liability insurance (collectively, “D&O Insurance”) with benefits and levels of coverage at least as favorable as such party’s existing policies as of the date of the combination agreement with respect to matters existing or occurring at or prior to the closing of the merger (including in connection with the combination agreement and the other transactions contemplated by the combination agreement). If such party and Stellantis for any reason fail to obtain such “tail” insurance policies as of the closing of the merger, Stellantis will continue to maintain in effect for a period of at least six years from and after the closing of the merger the D&O Insurance in place as of the date of the combination agreement with benefits and levels of coverage at least as favorable as provided in such party’s existing policies as of the date of the combination agreement.

The rights of the Indemnified Parties under the combination agreement are in addition to any rights such Indemnified Parties may have under Stellantis Articles of Association, any other applicable organizational documents, contract or law.

The combination agreement may be terminated:

In the event that the combination agreement is terminated by one party because the other party made a Change in Recommendation, then such other party will pay or cause to be paid to the party terminating the combination agreement an amount equal to €500 million (the “Termination Payment”) (exclusive of any applicable value-added tax).

In the event that the combination agreement is terminated by either party because the FCA Shareholders Approval or PSA Shareholders Approval has not been obtained, then the party whose shareholders’ approval was not obtained will pay or cause to be paid to the other party €250 million (exclusive of any applicable value-added tax).

In the event that the combination agreement is terminated by one party because the other party failed to hold a vote of its shareholders in order to obtain the relevant shareholders’ approval prior to March 31, 2021, then the breaching party will pay or cause to be paid to the non-breaching party the Termination Payment.

In the event that the combination agreement is terminated by one party pursuant to the applicable Material Breach Termination, then the breaching party will pay or cause to be paid to the non-breaching party the Termination Payment.

The combination agreement may be amended by the parties at any time before or after the approval of the merger by the PSA shareholders and the FCA shareholders, but after the approval of the PSA and the FCA shareholders has been obtained, no amendment may be made to the combination agreement for which applicable laws or the rules of any relevant stock exchange require further approval by either the PSA shareholders or the FCA shareholders without first obtaining the requisite approval of such shareholders. The combination agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.

At any time prior to the Effective Time, subject to applicable law, the parties may extend the time for the performance of any of the obligations or other acts of the other parties, waive any inaccuracies in the representations and warranties contained in the combination agreement or in any document delivered pursuant to the combination agreement or waive compliance with any of the agreements or the satisfaction of any of the conditions contained in the combination agreement. Any agreement on the part of a party to any such extension or waiver will be valid only if set forth in an instrument in writing, signed on behalf of such party. The failure of any party to the combination agreement to assert any of its rights under the combination agreement or otherwise will not constitute a waiver of those rights.

The combination agreement is governed by, and construed and enforced in accordance with, Dutch law.

Any dispute or claim arising out of or relating to the combination agreement will be referred to and finally resolved by an arbitration tribunal pursuant to the rules of arbitration of the International Chamber of Commerce and with the place of arbitration in Geneva, Switzerland; provided, that the foregoing will be without prejudice to the right of each party to seek interim or conservatory relief before a competent court in the Netherlands, whether before or after the commencement of any arbitration.

On September 14, 2020, FCA and PSA agreed to amend certain terms of the original combination agreement in order to address the liquidity impact on the automotive industry of the COVID-19 pandemic while preserving the economic value and fundamental balance of the original combination agreement. The amendment to the original combination agreement is described above in this section, and is attached to this prospectus as Appendix B.

FCA and PSA have prepared the cross-border merger terms for the merger in accordance with Directive (EU) 2017/1132 of 14 June 2017 relating to certain aspects of company law (codification), as amended from time to time, and, in the case of FCA, Part 7, Sections 2, 3 and 3A of Book 2 of the Dutch Civil Code and, in the case of PSA, Articles L. 236-25 et seq. and R. 236-13 et seq. of the French Commercial Code (the “Cross-Border Merger Terms”). The Cross-Border Merger Terms set out the main terms and conditions of the merger and include provisions consistent with the combination agreement that comply with the requirements of Dutch law and French law, as applicable.

The FCA Board approved the Cross-Border Merger Terms and the transactions contemplated in the Cross-Border Merger Terms on October 23, 2020. The PSA Supervisory Board and the PSA Managing Board approved the Cross-Border Merger Terms and the transactions contemplated in the Cross-Border Merger Terms on October 27, 2020.

Subject to the approval of the merger by the requisite votes of the FCA shareholders and the PSA shareholders and the satisfaction or waiver of the other conditions precedents to the merger, the Cross-Border Merger Terms provide that the merger will be effective at the Effective Time, at which time, the separate corporate existence of PSA will cease, and FCA will continue as the sole surviving corporation, and, by operation of law, FCA, as successor to PSA, will succeed to and assume all of the rights and obligations and other legal relationships, as well as the assets and liabilities, of PSA in accordance with Dutch law and French law. At the Governance Effective Time, FCA will be renamed Stellantis.

PSA will take, in accordance with applicable law, the applicable rules and regulations of the AMF and Euronext Paris and its organizational documents, all action necessary to convene a special general meeting of its shareholders entitled to double voting rights (the “PSA Special General Meeting”) and an extraordinary general meeting of its shareholders (the “PSA Extraordinary General Meeting”, and together with the PSA Special General Meeting, the “PSA Shareholder Meeting”), as promptly as practicable after the later of (x) the expiration of any creditor rights opposition period under French law or Dutch law and (y) the date which is 40 business days after the date on which the Registration Statement is declared effective. The PSA Shareholder Meeting will be convened to approve the merger in accordance with the Cross-Border Merger Terms and related corporate matters, and the removal of the double voting rights attached to the PSA ordinary shares.

At the PSA Extraordinary General Meeting, resolutions will be adopted by a two-thirds majority of the votes cast by the shareholders present or represented, provided that at least 25 percent of the PSA ordinary shares carrying voting rights are present or represented at the first convening of such meeting, or at least 20 percent of the PSA ordinary shares carrying voting rights are present or represented at the second convening of such meeting.

At the PSA Special General Meeting, resolutions will be adopted by a two-thirds majority of votes cast by the shareholders entitled to double voting rights present or represented; provided that at least one-third of the PSA ordinary shares carrying double voting rights are present or represented at the first convening of such meeting, or at least 20 percent of the PSA ordinary shares carrying double voting rights are present or represented at the second convening of such meeting.

Votes cast at the PSA Extraordinary General Meeting or the PSA Special General Meeting do not include voting rights attached to the PSA ordinary shares for which shareholders did not take part in the vote, abstained, or returned a blank or invalid vote.

As of October 31, 2020, 887,037,978 PSA ordinary shares were issued and outstanding, and the maximum number of votes entitled to be exercised at a meeting of PSA shareholders at which the holders of all outstanding PSA ordinary shares are present was 1,228,378,065, reflecting that certain PSA ordinary shares have accrued double voting rights pursuant to Article L. 225-123 of the French Commercial Code and PSA Articles of Association.

PSA shareholders will not have dissenters’, appraisal, cash exit or similar rights in connection with the merger.

On October 27, 2020, after careful consideration, the PSA Supervisory Board unanimously (i) approved the terms of the merger as reflected in the Cross-Border Merger Terms and the execution of the Cross-Border Merger Terms, (ii) directed that the Cross-Border Merger Terms be submitted to a vote at a general meeting of PSA shareholders and (iii) resolved to recommend that PSA shareholders vote to approve the Cross-Border Merger Terms. The PSA Supervisory Board unanimously recommends that PSA shareholders vote “FOR” the merger proposal.

At the extraordinary general meeting of FCA, to be held on [●] at [●] (Central European Time) at [●], FCA’s shareholders will vote on the following proposals:

At general meetings of FCA, resolutions are in general adopted with an absolute majority of the votes validly cast at the meeting. If less than one-half of the issued and outstanding share capital is present or represented at the meeting, the resolution to merge must be adopted with a majority of at least two-thirds of the votes cast. No quorum requirements apply to the general meetings of FCA shareholders. Blank votes will not be counted as votes cast. As of November 3, 2020, there were 1,574,714,499 FCA common shares and 449,610,500 FCA special voting shares outstanding. Every share (whether common or special voting) is entitled to one vote.

As a prerequisite to attending the general meeting and, to the extent applicable, exercising voting rights, the shareholders entitled to attend the meeting are required to inform the FCA Board in writing within the time frame mentioned in the convening notice. At the latest, this notice must be received by the FCA Board on the day mentioned in the convening notice. Shareholders and those permitted by Dutch law to attend the general meetings of FCA shareholders may cause themselves to be represented at any meeting by a proxy duly authorized in writing; provided they notify FCA in writing of their wish to be represented at such time and place as will be stated in the notice of the meeting. For the avoidance of doubt, such attorney is also authorized in writing if the proxy is documented electronically. The FCA Board may determine further rules concerning the deposit of the powers of attorney, such rules to be mentioned in the notice of the meeting. The chairman of the meeting will decide on the admittance to the meeting of persons other than those who are entitled to attend.

For each general meeting of FCA shareholders, the FCA Board may decide that shareholders will be entitled to attend, address and exercise voting rights at such a meeting through the use of electronic means of communication; provided that shareholders who participate in the meeting are capable of being identified through the electronic means of communication and have direct cognizance of the discussions at the meeting and the exercising of voting rights (if applicable). The FCA Board may set requirements for the use of electronic means of communication and state these in the convening notice. Furthermore, the FCA Board may, for each general meeting of FCA shareholders, decide that votes cast by the use of electronic means of communication prior to the meeting and received by the FCA Board will be considered to be votes cast at the meeting. Such votes may not be cast prior to the FCA Record Date (as defined below). Whether the provision of the foregoing two sentences applies and the procedure for exercising the rights referred to in those sentences will be stated in the notice.

Prior to being allowed admittance to a meeting, a shareholder and each person entitled to attend the meeting, or its attorney, must sign an attendance list, while stating his or her name and, to the extent applicable, the number of votes to which he or she is entitled. Each shareholder and other person attending a meeting by the use of electronic means of communication and identified in accordance with the above must be registered on the attendance list by the FCA Board. In the event that it concerns an attorney of a shareholder or another person entitled to attend the meeting, the name(s) of the person(s) on whose behalf the attorney is acting must also be stated. The chairman of the meeting may decide that the attendance list must also be signed by other persons present at the meeting.

Persons with the right to vote or attend the general meeting will be those persons who, as at [●], which is 28 days prior to such meeting (the “FCA Record Date”), are registered in the register established for that purpose by the FCA Board.

FCA is exempt from the proxy rules under the U.S. Securities Exchange Act of 1934, as amended.

Shareholders will be informed of the FCA extraordinary general meeting by issuance of a press release and notice on FCA’s website not less than 42 days prior to the scheduled date of the meeting.

The FCA Record Date for the extraordinary general meeting of FCA shareholders is [●], which is 28 days prior to such meeting.

FCA shareholders will not have dissenters’, appraisal, cash exit or similar rights in connection with the merger.

After careful consideration, the FCA Board has unanimously (i) determined that the combination agreement and the transactions contemplated by the combination agreement are in the best interests of, FCA and its shareholders, (ii) approved and declared advisable the combination agreement and the transactions contemplated by the combination agreement, (iii) directed that the combination agreement be submitted to a vote at a general meeting of FCA shareholders and (iv) resolved to recommend that FCA shareholders vote to approve the proposal. The FCA Board unanimously recommends that FCA shareholders vote “FOR” the merger proposal.

You may revoke your proxy vote, provided that the deadline for voting by proxy is seven days before the extraordinary general meeting of FCA shareholders. The procedure to revoke your proxy is further described below.

If you are a shareholder holding FCA common shares in a DTC participant account, you should follow the voting instructions on your proxy card provided to you by, or on behalf of, your DTC participant (being your bank or broker). For further assistance you should call the phone number listed on your proxy card or on your voting instruction form or contact your U.S. bank or broker.

Holders of FCA special voting shares may submit a revised instruction online in the same way followed to submit your previous online vote. U.S. registered shareholders seeking to amend or revoke their voting instruction should either (a) submit a revised instruction online via www.investorvote.com\FCAU, or (b) contact Computershare via web.queries@computershare.com to request a replacement proxy card. In each case, holders of FCA special voting shares and registered shareholders should ensure that their revised instruction is received no later than the seventh day prior to the meeting.

If you are a shareholder holding FCA common shares in a Monte Titoli participant account, you may revoke your proxy or your online vote posted through FCA’s website following the instruction reported on the proxy form or in the online voting platform provided through FCA’s website.

Pursuant to Stellantis Articles of Association, the Stellantis Board may have three or more directors (the “Directors”).

As of the date of this prospectus, the following persons have been nominated for appointment to the Stellantis Board effective on the day immediately following the completion of the merger and will be submitted for election at the extraordinary general meeting of FCA to be held on [●]:

The initial term of office of each of the Chairman, Chief Executive Officer, Senior Independent Director and Vice Chairman will be five years, in each case beginning on the day immediately following the date on which the closing of the merger occurs. The initial term of office for each of the other directors will be four years. Mr. Elkann and Mr. Tavares will be the only executive directors.

In accordance with the combination agreement, James Kevin Scott and Wan Ling Martello have been nominated by FCA; Henri de Castries and Ann Godbehere by PSA; John Elkann and Andrea Agnelli by Exor; Nicolas Dufourcq by BPI; Robert Peugeot by EPF/FFP; and Fiona Clare Cicconi and Jacques de Saint-Exupéry in representation of FCA and PSA employees, respectively.

Stellantis Board Regulations provide that, in addition to the Chairman’s other powers set out in Stellantis Board Regulations, if the Chairman is an executive Director, he or she will be consulted and work together with the CEO on that basis on important strategic matters affecting Stellantis:

in each case, without prejudice to the powers of the Stellantis Board.

The CEO will have the powers set out in Stellantis Articles of Association and Stellantis Board Regulations. In addition, he or she will be responsible for the management of Stellantis in accordance with the Dutch Civil Code and will be vested with full authority to represent Stellantis individually.

Summary biographies of the Directors are set out below.

Born in New York in 1976, John Elkann obtained a scientific baccalaureate from the Lycée Victor Duruy in Paris, and graduated in Engineering from Politecnico, the Engineering University of Turin (Italy). While at university, he gained work experience in various companies of the FCA group in the United Kingdom and Poland (manufacturing) as well as in France (sales and marketing). He started his professional career in 2001 at General Electric as a member of the Corporate Audit Staff, with assignments in Asia, the United States and Europe. John Elkann is Chairman of Ferrari N.V. and Ferrari S.p.A., Chairman of GEDI Gruppo Editoriale S.p.A. and a board member of PartnerRe Ltd. He also was a board member of The Economist Group from 2009 to 2020. John Elkann is a member of the Board of Trustees and of the Nominating Committee of the Museum of Modern Art (MoMA). He also serves as Chairman of the Giovanni Agnelli Foundation.

He held various positions within the Renault Group between 1981 and 2004, before joining the Nissan Group. Carlos Tavares was appointed Executive Vice President, Chairman of the Management Committee Americas and President of Nissan North America in 2009, before being appointed as Chief Operating Officer of Renault, a position he held until 2013. Carlos Tavares also serves as a director of Airbus Holding S.A., and is a member of the board of directors of the European Automobile Manufacturers’ Association (ACEA).

Robert Peugeot has held various executive positions within PSA. From 1998 to 2007, he was vice-president for innovation and quality, and a member of the PSA’s Executive Committee. In addition, Robert Peugeot serves as chairman of the board of FFP S.A.; director of Établissements Peugeot Frères S.A.; director of Faurecia S.E.; director of FFP Investment UK Ltd.; chairman of F&P S.A.S.; managing director of S.A.R.L. CHP Gestion; managing director of SC Rodom; permanent representative of F&P S.A.S. on the board of directors of Safran S.A.; member of the supervisory board of Signa Prime; director of Sofina S.A.; member of the supervisory board of Soparexo S.C.A.; director of Tikehau Capital Advisors S.A.S; and permanent representative of Maillot II S.A.S, on the board of directors of Sicav Armene 2.

He is a Knight of the French National Order of Merit and a Knight of the French Legion of Honour.

Henri de Castries was the chairman of the management board of AXA S.A. from 2000 and chairman and chief executive officer from April 2010 until September 2016. He previously worked for the French Finance Ministry Inspection Office and the French Treasury Department. In addition, Henri de Castries currently serves as director of Argus Media Ltd; chairman of Europe and special advisor of General Atlantic; chairman of the board of directors of AXA Assurances IARD Mutuelle; chairman of the board of directors of AXA Assurances Vie Mutuelle; member of the global advisory council of Leapfrog Investments Ltd; director of HSBC Holdings plc.; and vice-chairman of the board of directors of Nestlé S.A.

Born in Turin in 1975, he studied at Oxford (St. Clare’s International College) and Milan (Università Commerciale Luigi Bocconi). Andrea Agnelli began his professional career in 1999 at Ferrari Idea in Lugano before moving to Lausanne to join Philip Morris International, from 2001 to 2004. In 2005, he returned to Turin to work in strategic development for IFIL Investments S.p.A. (now EXOR N.V.).

Andrea Agnelli is also a board member of Giovanni Agnelli B.V., board member of EXOR N.V., a member of UEFA’s Executive Committee and a member of the Advisory Board of BlueGem Capital Partners LLP. Previously he served as board member of Lega Serie A and as board member of the “Fondazione per la mutualità generale negli sport professionistici”.Andrea Agnelli was appointed to the board of directors of Fiat S.p.A. on May 30, 2004 and became a member of the board of directors of FCA on October 12, 2014.

Fiona Clare Cicconi holds a diploma in international business studies from Leeds Metropolitan University.

Jacques de Saint-Exupéry has held various positions within PSA since 1984. Since 2011, he has been working within the management control team covering the activities of the corporate finance and treasury department as well as the financial communication department.

Nicolas Dufourcq began his career at the French Ministry of Economy and Finance in 1988 and then joined the French Ministry of Health and Social Affairs in 1992, before joining France Telecom in 1994. In 1998, he created Wanadoo, the internet access leader, a subsidiary of France Telecom, and listed it for €20bn in 2000. Between 1998 and 2003, he was CEO of Wanadoo and executive director of France Telecom in charge of the internet, cable and pay TV. Nicolas Dufourcq joined Capgemini in 2003, where he was in charge of the central and southern Europe region. From 2004 to 2013, he served as chief financial officer and deputy chief executive officer of Capgemini. Since February 7, 2013, Nicolas Dufourcq has been the chief executive officer of Bpifrance SA. In addition, Nicolas Dufourcq serves as chief executive officer of Bpifrance Financement S.A.; chief executive officer of Bpifrance Investissement S.A.S.; chief executive officer of Bpifrance Assurance Export S.A.S.; chairman and chief executive officer of Bpifrance Participations S.A.; permanent representative of Bpifrance Participations S.A. on the board of directors of Orange; vice-chairman of the supervisory board of STMicroelectronics N.V.; and member of the supervisory committee of Doctolib S.A.S.

Ann Frances Godbehere started her career with Sun Life of Canada in 1976 in Montreal, Canada, and joined M&G Group in 1981, where she served as senior vice president and controller for life and health, and property and casualty businesses throughout North America. She joined Swiss Re in 1996, after it acquired the M&G Group, and served as chief financial officer from 2003 to 2007. From 2008 to 2009, she was interim chief financial officer and an executive director of Northern Rock bank in the initial period following its nationalization. Ann Frances Godbehere has also held several non-executive director positions at Prudential plc, British American Tobacco plc, UBS AG, and UBS Group AG. Most recently, and until May 2019, Ann Frances Godbehere served as a non-executive director of Rio Tinto plc and Rio Tinto Limited. She was also a senior independent director of Rio Tinto plc. In addition, Ann Frances Godbehere serves as non-executive director of Royal Dutch Shell plc. She is also a fellow of the Institute of Chartered Professional Accountants and a fellow of the Certified General Accountants Association of Canada.

From 2012 to 2015, Wan Ling Martello served as Nestlé’s chief financial officer, and from 2011 to 2012 she served as Nestlé’s executive vice president. From 2005 to 2011, Wan Ling Martello was a senior executive at Walmart Stores, Inc., a retail corporation, where she served as executive vice president for global ecommerce and executive vice president, chief financial officer & strategy. Wan Ling Martello has served on the board of directors of Alibaba Group since 2015 and of Uber Technologies, Inc. since 2017.

Wan Ling Martello holds an MBA from the University of Minnesota and a BS from the University of the Philippines.

Prior to joining Microsoft, Kevin Scott was senior vice president of engineering and operations at LinkedIn from 2011 to 2016. Earlier in his career, Kevin Scott oversaw mobile ads engineering at Google, including the integration of Google’s acquisition of AdMob. At AdMob, Kevin Scott was responsible for engineering and operations for the world’s leading platform for mobile monetization. Before joining AdMob, Kevin Scott held numerous leadership positions at Google in the search and advertising divisions of the company.

Kevin Scott is the founder of the non-profit organization Behind the Tech, a member of the Anita Borg Institute’s board of trustees and a director of The Scott Foundation.

Kevin Scott holds an M.S. in computer science from Wake Forest University, a B.S. in computer science from University of Lynchburg, and has completed most of his Ph.D. in computer science at the University of Virginia.

Messrs. John Elkann and Andrea Agnelli, both nominated to be appointed as Directors, are cousins.

Pursuant to Stellantis Articles of Association and Stellantis Board Regulations, the Stellantis Board will have power to appoint any committees, composed of Directors and officers of the company and of group companies. The Stellantis Board will determine the specific functions, tasks and procedures, as well as the duration of any such committees.

As contemplated by the combination agreement, the committees of the Stellantis Board will consist of (i) an audit committee (the “Audit Committee”), (ii) a remuneration committee (the “Remuneration Committee”) and (iii) a governance committee (the “Governance Committee”). The parties to the combination agreement will mutually agree upon the members of each of the Audit Committee, Remuneration Committee and Governance Committee, as well as the chairs of each such committee, subject to the following requirements set forth in the combination agreement:

Effective upon completion of the merger, the Stellantis Board will establish an Audit Committee.

The Audit Committee will be appointed by the Stellantis Board after the closing of the merger and will be comprised of only Independent Directors. The Senior Independent Director or a former executive Director will not be able to serve as chairman of the Audit Committee. Audit Committee members will also be required (i) not to have any material relationship with the company or to serve as auditors or accountants for the company; (ii) to be “independent”, for purposes of NYSE rules, Rule 10A-3 of the Exchange Act and the Dutch Corporate Governance Code; and (iii) to be “financially literate” and have “accounting or selected financial management expertise” (as determined by the Stellantis Board). At least one member of the Audit Committee will be a “financial expert” as defined by the Sarbanes-Oxley Act and the rules of the SEC and section 2(3) of the Decree on the establishment of an audit committee. No Audit Committee member may serve on more than four audit committees for other public companies, absent a waiver from the Stellantis Board which must be disclosed in the company’s annual report. Unless decided otherwise by the Audit Committee, the independent auditors of the company, the chief financial officer and the head of internal audit attend its meetings while the CEO is entitled to attend meetings of the Audit Committee unless the Audit Committee determines otherwise and will attend the meetings of the Audit Committee if the Audit Committee so requires. The Audit Committee will meet with the independent auditors at least once per year outside the presence of the executive Directors and management.

Effective upon completion of the merger, the Stellantis Board will establish a Remuneration Committee.

The Remuneration Committee will be appointed by the Stellantis Board after the closing of the merger and is comprised of at least three non-executive Directors. More than half of its members will be independent under the Dutch Corporate Governance Code. The chair of the Remuneration Committee will be selected from among the Independent Directors nominated by FCA (or his or her replacement). Unless decided otherwise by the Remuneration Committee, the head of human resources of the company attends its meetings.

Effective upon completion of the merger, the Stellantis Board will establish a Governance Committee.

The Governance Committee will be appointed by the Stellantis Board after the closing of the merger and will be comprised of at least three Directors. More than half of its members will be independent under the Dutch Corporate Governance Code. The chair of the Governance Committee will be selected from among the Independent Directors nominated by PSA (or his or her replacement).

The Chief Executive Officer of Stellantis is responsible for the management of Stellantis in accordance with the Dutch Civil Code and will be supported by the senior management of Stellantis.

The other members of the senior management of Stellantis have not yet been appointed.

For information regarding the compensation paid, and benefits in kind granted, for the fiscal year ended December 31, 2019 by FCA and its subsidiaries to Messrs. Elkann and Agnelli, as well as information regarding their pension, retirement or similar benefits, please refer to the FCA 2019 Form 20-F, under the caption “Corporate Governance—Remuneration Report”, which is incorporated by reference in this prospectus.

Ms. Fiona Clare Cicconi, Ms. Wan Ling Martello and Mr. James Kevin Scott did not receive any compensation, benefits in kind or pension, retirement or similar benefits from FCA or its subsidiaries for the fiscal year ended December 31, 2019.

Mr. Tavares is currently Chairman of the PSA Managing Board and will become Chief Executive Officer and Executive Director of Stellantis following the closing of the merger.

The annual remuneration for Mr. Tavares as PSA’s Chairman is determined by the Appointments, Compensation and Governance committee of the PSA Supervisory Board and approved at the annual meeting of PSA shareholders. In 2019, it consisted of a fixed and variable cash component, an exceptional cash component related to the Opel Vauxhall “PACE!” recovery plan, certain benefits in kind and an equity-based, long-term incentive plan. Mr. Tavares also participates in PSA’s pension plan, pursuant to which he receives the pension top-up contribution described below.

The below table shows the total remuneration paid by PSA to Mr. Tavares for the fiscal year ended December 31, 2019, including the value of performance shares awarded.

Under PSA’s annual variable compensation plan, variable compensation is set as a percentage of the fixed personal compensation. In the fiscal year 2019, the at-target variable compensation component for Mr. Tavares was 170 percent of his fixed compensation, capped at 200 percent in case of extraordinary performance. Payment of the variable compensation is conditional upon satisfaction of a triple trigger threshold applicable to all beneficiaries of PSA’s variable compensation plan, the satisfaction of collective group targets for the PSA Managing Board and the satisfaction of Mr. Tavares’s personal targets. In the fiscal year 2019, the collective group target and the personal target accounted for 70 percent and 30 percent, respectively, of Mr. Tavares’s maximum achievable variable compensation. No stock subscription or purchase option plan is in effect with respect to Mr. Tavares.

The triple trigger threshold, collective group targets and Mr. Tavares’s personal targets for 2019 are set out below:

In 2019, Mr. Tavares was entitled to exceptional compensation related to Opel Vauxhall’s “PACE!” recovery plan. The payment of exceptional compensation was subject to the satisfaction of certain targets related to Opel Vauxhall’s adjusted operating income and operating free cash flow during the fiscal year 2019. Each component accounts for 50 percent of the exceptional compensation calculation. The exceptional compensation was capped at 125 percent of the target exceptional compensation in the event of extraordinary performance. Payment of the exceptional compensation was approved at the general meeting of PSA’s shareholders on June 25, 2020.

Mr. Tavares is a participant in a retirement plan that provides an annual benefit that is directly tied to PSA’s results and performance. The plan provides for the payment of an annual top-up contribution, of which 50 percent is in the form of contributions to an external fund as part of an optional defined contribution pension plan that can only be withdrawn when the plan participant retires, and the other 50 percent is in cash (based on a system of upfront taxation).

The contribution is equivalent to 25 percent of the amount represented by Mr. Tavares’s fixed compensation and variable compensation allocated for the year (i.e., €1,500,000 and €2,549,388, respectively). The purpose of including the bonus in the calculation base is to ensure that the contribution is tied to PSA’s performance. In respect of the fiscal year 2019, the annual top-up contribution awarded to Carlos Tavares for the performance of his duties amounted to €1,012,347 (this amount is subject to payroll taxes and income tax, and the net payment will be approximately 50 percent of the amount shown).

Mr. Tavares also participates in PSA’s equity-based, long-term incentive plan (the “PSA LTI”). Under the PSA LTI, he is required to (i) retain in registered form, and for the duration of his position as chairman of the PSA Managing Board, at least 25 percent of the number of vested shares and (ii) commit to refrain from carrying out transactions to hedge risks related to the performance shares. Under the 2019 PSA LTI, Mr. Tavares was allocated 130,000 PSA ordinary shares. The performance shares vest in two tranches, with 50 percent vesting after three years and 50 percent after four years from the date of allocation. The final number of performance shares vested at the end of each vesting period will be determined based on PSA’s actual performance for three consecutive fiscal years (2019-2021), measured across the following performance conditions:

In 2019 the members of the PSA Managing Board, including Mr. Tavares, did not receive any compensation or attendance fees for other companies of the PSA group. See also Note 7.2.B to the PSA Consolidated Financial Statements for a description of the performance share plan established in 2019.

Mr. Peugeot is currently the permanent representative of FFP on the PSA Supervisory Board and will become the permanent representative of FFP on the Stellantis Board following the closing of the merger.

As a member of the PSA Supervisory Board, Mr. Peugeot’s remuneration is determined by the PSA Supervisory Board and approved by the annual general meeting of PSA’s shareholders. Mr. Peugeot’s remuneration consists of fixed and variable components for attendance at meetings of the PSA Supervisory Board and its committees, as well as additional fixed compensation where travel is required in order to attend such meetings.

In fiscal year 2019, the aggregate amount of remuneration for Mr. Peugeot was as follows:

Henri de Castries, Nicolas Dufourcq and Ann Godbehere did not receive any compensation, benefits in kind or pension, retirement or similar benefits from PSA or its subsidiaries for the fiscal year ended December 31, 2019.

As of October 27, 2020, Mr. Elkann and Mr. Agnelli owned, respectively, 298,435 and 36,102 FCA common shares, in each case representing less than one percent of the FCA common shares outstanding.

As of September 1, 2020, Mr. Tavares owned 325,000 PSA ordinary shares, representing 0.04 percent of PSA ordinary shares issued and outstanding as of such date.

As of September 1, 2020, Mr. Peugeot owned 239,343,004 PSA ordinary shares, representing 26.45 percent of the PSA ordinary shares issued and outstanding as of such date. Such number of shares includes the 1,000 PSA ordinary shares held directly by Mr. Peugeot, the 110,622,220 PSA ordinary shares held by EPF/FFP, which may be deemed to be beneficially owned by Mr. Peugeot, as Chairman of the FFP board, and the 18,096,564 PSA ordinary shares that FFP may acquire pursuant to an equity swap agreement with an investment services provider (as further described below). In addition, as of July 23, 2020, Mr. Peugeot held 9,682 ordinary shares of FFP and 500 ordinary shares of Faurecia. As of July 23, 2020, FFP held 510,000 ordinary shares of Faurecia, which may deemed to be beneficially owned by Mr. Peugeot as Chairman of the FFP board. On March 6, 2020, FFP entered into an equity swap agreement with an investment services provider that will expire on June 30, 2021. Under this equity swap agreement, FFP may in its discretion acquire up to 18,096,564 ordinary shares of PSA for a total amount of €228 million, which would represent approximately 2 percent of PSA’s outstanding ordinary shares.

In addition, as of September 1, 2020, Mr. de Saint-Exupéry, who is expected to serve as a director representing the PSA employees on the Stellantis Board following the closing of the merger, held 200 PSA ordinary shares and 562 units in the PSA Employee Stock Ownership Fund.