Yesterday Groupe PSA announced that they will withhold their 2019 dividend payout. The moves comes after rumours last week that Fiat Chrysler Automobiles (FCA) would also be withholding dividend payments.

A $1.19 billion ordinary dividend for both FCA and PSA was announced in December as part of the binding tie-up agreement between the two automakers to create the world’s fourth-largest carmaker.

Shares of PSA and FCA Fiat Chrysler and Peugeot owner PSA were down on Thursday after the two carmakers said in a coordinated move that they would not pay their planned ordinary dividend on 2019 results due to the impact of the COVID-19 pandemic.

Both stocks have taken a downturn during the pandemic and by 07:50 GMT, PSA shares were down 2.4% while FCA dropped 1.3%.

A source close to PSA said that the withdrawal of both ordinary dividends was a safety measure to protect cash reserves as much as possible and did not change the terms of the deal as both companies agreed to the same.

The coronavirus pandemic has thrown the global auto industry into the worst tailspin since the 2008-09 financial crisis. Consumer demand for vehicles has plummeted as governments around the world have enforced lockdowns.

PSA and FCA re-iterated on Wednesday that preparations for their planned 50-50 merger were “advancing well”, including with respect to antitrust and other regulatory filings.

The closing of the deal is expected on schedule, before the end of the first quarter of next year, they said.

EU antitrust regulators will decide by June 17, 2020 whether to clear the PSA-FCA $50 billion merger, according to a European Commission filing on Monday.