After a long journey, Fiat Chrysler and PSA seal the merger to become Stellantis

MILAN (Reuters) – Fiat Chrysler and PSA will seal their long-awaited merger on Saturday, allowing the world’s fourth-largest auto group to shift to electric driving with deep enough pockets and take on big rivals Toyota and Volkswagen .

FILE PHOTO: Stalantis’ logo is visible in this image made available on November 9, 2020. FCA / Handout communication via REUTERS

Italian-American and French automakers took a year to finalize the $ 52 billion deal, during which the global economy was developed by the COVID-19 epidemic. They first announced the merger in October 2019, forming a group with annual sales of around 8.1 million vehicles.

The shares of Stellantis, led by current PSA chief executive Carlos Tavare, will start trading in Milan and Paris on Monday and in New York on Tuesday.

Now analysts and investors are focusing their attention on how the Towers plan to face the group’s major challenges – from excess production capacity in China to a spectacular performance.

Tavares will hold its first press conference as Stellantis CEO on Tuesday, with chairman John Alcann following the NYSE bells.

The FCA and PSA have stated that Stellantis could cut annual costs by more than 5 billion euros ($ 6.1 billion) without the plant being closed, and investors would be eager to learn more about how it will do so.

Marco Santino, a partner at consultant Oliver Wyman, said he hoped Taware would soon reveal the outline of his action plan, but without divulging many details in advance.

“He has proven to be a man who likes to act on words, so I don’t think he will make a loud statement or try to sell the target,” he said.

Like all global automakers, Stellantis needs to invest billions in the coming years to transform its vehicle category for the electric era.

But other pressing looms loomed, including reviving the group’s trailing fate in China, rationalizing its vast global empire, and addressing over-prosperity on a large scale.

“This step will be a step by process, it will also allow the market to appreciate each step better. I don’t think we will have all the details before one year.

FCA CEO Mike Manley – who will lead Stellantis’ key North American operations – has said 40% of the carmaker’s expected synergy will be from the convergence of platforms and powertrains and by optimizing R&D investment, saving on purchases 35 % And others will be from 7%. Savings on sales operations and general expenses.

($ 1 = 0.8226 euro)

Reporting by Giulio Piovaccari. Editing by Mark Potter


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