Exclusive: French side of PSA-Fiat merger want governance guarantees – sources

PARIS (Reuters) – The French partners in the planned merger between French carmaker PSA and Fiat Chrysler are seeking reassurances before the deal is signed that the number of seats they are allotted under the draft deal will not change if CEO Carlos Tavares leaves, two sources close to PSA told Reuters.

The sources said the French partners were seeking clarification on the issue before a Memorandum of Understanding (MOU) sealing the merger deal is signed, but there is no evidence that the question has surfaced in discussions between the two sides as an obstacle to the deal.

Under the terms of the draft MOU, PSA and Fiat Chrysler would each have five seats on the board of the merged entity, while the eleventh seat would go to Tavares, who is currently CEO of PSA and is set to take on the same role in the merged entity.

French shareholders view Tavares’ seat as giving them the de facto role of senior partner in the merged company. According to the two sources close to PSA, who spoke on condition of anonymity, they want to know this advantage would be preserved in the event of Tavares’ departure.

PSA, the BPI public investment bank representing the French government’s shareholding and FCA declined to comment.

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