Por Giulio Piovaccari
MILAN, Jan 16 (Reuters) – Fiat Chrysler and PSA sealed their long-awaited merger on Saturday to create Stellantis, the world’s fourth-largest car group with enough capital to finance the shift to electric driving while being able to compete at the same time. to with its big rivals Toyota and Volkswagen.
It has taken Italian-American and French automakers more than a year to close the $ 52 billion deal. In all that time, the world economy has been rocked by the COVID-19 pandemic.
Both companies announced their plans to merge in October 2019 to create a group with annual sales of around 8.1 million vehicles.
“The merger between Peugeot SA and Fiat Chrysler Automobiles NV, which will lead the way towards the creation of Stellantis NV, became effective today,” the two automakers said in a statement.
Stellantis shares, which will be chaired by current PSA CEO Carlos Tavares, will begin trading in Milan and Paris on Monday and in New York on Tuesday.
Now analysts and investors are seeking to know how Tavares plans to address the enormous challenges facing the group, from excess production capacity to poor performance in China.
Tavares will give his first press conference as CEO of Stellantis on Tuesday, after ringing the bell at the New York Stock Exchange (NYSE).
FCA and PSA have said that Stellantis can reduce annual costs by more than 5 billion euros (6.1 billion dollars) without plant closures.
Like all car manufacturers in the world, Stellantis needs to invest billions in the next few years for the electrical transition of its range of vehicles.
But the firm also has other pressing tasks that include reviving business in China, rationalizing an expanding world empire and dealing with massive excess capacity.
FCA Chief Executive Mike Manley, who will lead Stellantis’ key North American operations, said 40% of the expected synergies from the merger – projected at more than € 5 billion – will come from platform convergence, transmission and the optimization of investments in research and development.
($1 = 0,8226 euros)
(Edited by Mark Potter and Kirsten Donovan; translation by Jorge Martínez)