Fiat Chrysler Automobiles shares surged while Peugeot plunged in otherwise listless European stock markets on Thursday.
Fiat Chrysler FCA, +8.58% jumped 9.6% while Peugeot UG, -12.51% fell 12.1% as the two companies said they would come together in a 50-50 merger, with FCA shareholders also getting a special dividend of 5.5 billion euros and Peugeot distributing its 46% stake in car parts supplier Faurecia EO, -4.03% to its shareholders. Faurecia shares fell 3.8%.
“Adjusted for differences in market cap and distribution, we estimate PSA is paying a 32% premium to take control of FCA and its shareholders assume more market risk,” said analysts at Jefferies.
Renault RNO, -3.88% , which previously tried to merge with Fiat, fell 3.4%.
After closing Wednesday at its second-highest level of the year, the Stoxx Europe 600 SXXP, -0.72% dropped 0.32% to 397.43.
It was the first opportunity in Europe to react to news the U.S. Federal Reserve cut interest rates by a quarter-point, and that Chairman Jerome Powell said interest rates wouldn’t increase until inflation increased substantially. China doubts that a long-term trade deal can be reached with President Trump, according to a report from Bloomberg News, and this pressured stocks.
Of movers in Europe, chip equipment maker ASM International ASM, +8.16% surged nearly 8% as it reported stronger new order growth than it had guided for alongside a 37% increase in profit during the third quarter.
Eutelsat Communications ETL, -11.75% fell 11.9% as the satellite operator reported a worse-than-forecast 6% drop in comparable sales growth during the first quarter and the company’s CFO told investors there’s a higher likelihood fiscal year revenue will be at the lower end of its estimates.
Air France-KLM AF, -3.29% fell 4.7% as the airline reported a sharp drop in third-quarter profit, with its operating profit lagging analyst forecasts. The airline also said fourth-quarter unit revenue would fall.