Fiat-Peugeot deal would boost Exor's coffers to 3.6 billion euros in 2022

TURIN, Italy (Reuters) - Fiat Chrysler’s top shareholder Exor will have a total of 3.6 billion euros ($4 billion) in 2022 to invest once a deal to merge the carmaker with rival Peugeot goes through, Exor’s boss John Elkann said.

Chairman and CEO of Exor and Chairman of Fiat Chrysler Automobiles John Elkann and Exor Managing Director and Chairperson CNH Industrial Suzanne Heywood attend investor day held by the holding group of Italy's Agnelli family in Turin, Italy November 21, 2019. REUTERS/Massimo Pinca

Elkann, who leads the Agnelli family’s investment vehicle, said he was confident Fiat Chrysler (FCA) and Peugeot owner PSA would sign a binding agreement by the end of the year and dismissed concerns a lawsuit filed against FCA by General Motors could derail the deal.

In presenting Exor’s new strategy to investors 10 years after the holding company was established, Elkann said Exor would have about 2 billion euros of cash in 2022 for acquisitions, before taking into account an expected special dividend of around 1.6 billion euros from the FCA-PSA deal.

In addition to being chairman and chief executive of Exor, Elkann is chairman at FCA, in which Exor holds a 29% stake.

Besides FCA, Exor’s assets include controlling stakes in luxury carmaker Ferrari, industrial vehicle manufacturer CNH Industrial, re-insurer Partner Re and Italian Serie A soccer team Juventus.

It also has a 43% stake in publishing group The Economist.

Elkann said Exor would not pay out special dividends to its investors following the FCA-PSA merger. He also ruled out in the short term a new share buyback, which is the traditional tool for the group to award its shareholders extraordinary remuneration.

“We have just completed an own-share repurchase program and we don’t plan to launch a new one, so all the extraordinary dividend we would get from a PSA deal will be used for acquisitions,” he said.

Elkann added Exor had not yet decided in which industries it may expand its business.

“But I see ourselves buying new companies in the future,” he said, adding Exor would keep a strong focus on investments in the ‘environmental, social and governance’ (ESG) category.

Elkann said the family intended to remain a stable shareholder in the auto sector. ($1 = 0.9029 euros)

Additional reporting by Valentina Za in Milan;Editing by Elaine Hardcastle