Why Fiat Chrysler's Stock Surged Today

Shares of Fiat Chrysler Automobiles (NYSE: FCAU) were trading higher on Tuesday afternoon. FCA and French automaker Peugeot (OTC: PUGOY) said in a joint statement that they have agreed to revise the terms of their merger agreement, which will create the world's fourth-largest automaker when it closes next spring.

As of 3 p.m. EDT on Tuesday, FCA's shares were up about 7.9% from Monday's closing price.

FCA and Peugeot announced that they had agreed to some changes to their plan to merge into a new global automaker called Stellantis. The most significant change was to a provision to pay out 5.5 billion euros ($6.5 million) in a special dividend to FCA shareholders before the merger closes. That payout has been reduced to 2.9 billion euros; in exchange, Peugeot will distribute its 46% stake in auto supplier Faurecia to all shareholders of the new company once the deal closes.

Source Fool.com