PSA - 2019 Universal Registration Document

ANALYSIS OF THE BUSINESS AND GROUP OPERATING RESULTS IN 2019 AND OUTLOOK Major contracts

Comau Separation

lock-up - From the date of the combinationagreement until n 3 yearsafter closingof the mergerExor, Bpifranceand EPF/FFP will be subjectto a lock-upin respectof theirshareholdings in the relevantcompanybefore closingof the mergerand in DutchCo thereafter,except that Bpifrancewill be permittedto reduce its shareholdings by 5% in PSAor 2.5% inDutchCo; and DongfengBuy-back - Dongfenghas agreedto sell, and PSA has n agreedto buy,30.7 millionPSAordinarysharespriorto closingof the merger (the ordinary shares repurchasedby PSA will be cancelled).Notwithstanding the above, Dongfengmay sell all or part of such shares to third parties prior to the closing of the merger,in whichcasethe purchaseby PSAdescribedin the prior sentence will apply to the balance of such 30.7 million PSA ordinary shares not otherwise sold by Dongfeng. Dongfeng is subjectto a lock up until the EffectiveTimefor the balanceof its participation in PSA,resultingin an ownershipof 4.5%in DutchCo immediatelyafter the Effective Time.

Promptly following the Effective Time, DutchCo is permitted to allocate to its shareholders through a demerger or similar transactionall the sharesheld by DutchCoin Comauor implement other value-creatingalternativestructures,includingthe sale of all the shares held by DutchCoin Comau (each of such transactions, the “ Comau Separation ”). FCA shall, prior to the closing of the merger, work diligently to prepare for the Comau Separationto enable the ComauSeparationto be completedpromptlyfollowing the closingof the merger, includingby establishingthe perimeter, capital structure and governanceof Comau in consultationwith PSA and, if applicable,preparingall necessarydocumentationfor the listingof Comau shares on theappropriatesecuritiesexchange.

Other Provisions

Certain Covenants

The combination agreement contains customary exclusivity provisions requiring the parties to refrain from soliciting any acquisition proposal from third-parties as well as covenants requiring the Board of Directors of each of FCA and PSA to recommend that their respective shareholders approve the transaction,subjectto limitedexceptionsto ensurecompliancewith the directors’ fiduciary duties in connection with a superior proposal. The obligation of each party to effect the merger is subject to customaryclosing conditions,includingthe absenceof a material adverseeffectwithrespectto the otherparty,regulatoryclearances andapprovalby theshareholders of PSA andFCA. The Combinationagreement is available on the website of the Group(www.groupe-psa.com), section “ PSA-FCAmergerproject ”. Abandonment of the transformation project of Peugeot S.A. into a European Company The SupervisoryBoard approved,during its meeting on July 23, 2019, a project to transformPSA into a EuropeanCompany(SE) and authorizedthe ManagingBoard to initiate certain operations with a view to carrying out this transformation.It was initially envisagedthat this transformationproject would be submittedto the PSA General Meeting of shareholderson May 14, 2020. PSA ManagingBoard, after having been authorizedby the Supervisory Board,decided,duringits meetingof February25, 2020, to put an end to the process of transformationof PSA into a European Company.This decision comes within the context of the merger projectbetweenPSA and FCAwithinthe frameworkof whichPSA has undertakento put an end to the processof transformationof PSA into a EuropeanCompany

In addition to making reciprocal customary representationand warranties and agreeing to customary restrictions on their respective operations as from the time of the combination agreementuntil the EffectiveTime,FCAand PSAeachhaveagreed to take certain actions between the date of the combination agreement and the Effective Time, such as the seeking of competition law and other regulatory approvals, the making of stock exchangeand securitiesfilings,and the applicationfor listing of the DutchCo common shares issued in connection with the merger on the NYSE, Euronext Paris and the MTA prior to the closingdateof the merger.

Pre-merger Distributions

Prior to the EffectiveTime (i) an extraordinarycash distributionof €5.5 billionmay be paid by FCA to its shareholders,(ii) an ordinary dividendfor an amount of €1.1 billionin respect of the fiscal year ending31 December2019maybe paidby eachof FCAandPSAand (iii) if the closingof the merger has not occurredbefore the 2021 annual generalmeetingsof PSA and FCA, an ordinarydividendin respectof the fiscal year ending31 December2020 for an amount to be agreed by FCA and PSA on the basis of their respective distributableamountsshall be paidby eachof PSAand FCA, in the case of (ii) and (iii) subject to the availability of sufficient distributableamounts.

Faurecia Distribution

PSA is permitted to distribute to its shareholdersby special or interimdividendall of the shares held by PSA in Faureciaprior to theEffectiveTimewithnomaterialchangesin anycurrentlyexisting commercialarrangementsbetweenPSA and Faurecia, other than amendments in the ordinarycourse.

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GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT