FCA has come in for criticism in Italy over a 5.5 billion euro ($6 billion) special dividend that is part of the PSA deal after its local business said it was in talks with Rome and Intesa Sanpaolo over a 6.3 billion euro ($6.9 billion) state-backed loan to cope with the COVID-19 crisis.
The potential payment of such a big dividend to shareholders when the coronavirus crisis has left cash-starved manufacturers pushing for government support has been questioned within Italy's ruling coalition.
Elkann said the reasons behind the proposed merger are "stronger than ever" because the COVID-19 pandemic adds to existing challenges facing the industry.
Preparatory work for the merger has proceeded "on time and as envisaged," said Elkann, who is also chairman and CEO of Exor.
The dividend -- to be paid by parent company Fiat Chrysler Automobiles NV in the Netherlands -- is a central part of the overall value of the merger, but Italy could look into it, a senior government source has said.
"This is a loan which is really designed to help the automotive sector in Italy which we know is a very important part of the Italian economy," Elkann said, referring to the state-backed loan.
Italy's treasury undersecretary Pier Paolo Baretta on Wednesday told Reuters that Rome might consider extending a ban on dividend payments for companies accessing state guarantee from an existing deadline of Dec. 31, 2020, to a 12-month period following the loan guarantee concession.
"That would be reasonable. Doing more may hit the companies' value," Baretta said.
This could potentially complicate FCA's plans, as the special dividend payment is due just before the closing of the merger with PSA.
Some analysts suggested some of the merger's terms -- in particular the amount of the special dividend, which was agreed before the coronavirus outbreak -- could be reviewed to take account of the current state of the stock market and the automotive market and to preserve cash at the automaker.
