Business & Investment

Fiat Chrysler, Peugeot Get Green Light For $ 52 Billion Carmaker

Fiat Chrysler (FCA) and PSA congratulate investors on a $ 52 billion merger to set up the world’s fourth-largest car maker on Monday, saying that shares in a new company called Stellantis will open in two weeks. Announced.

With about 8 million cars produced worldwide and more than € 165 billion ($ 203 billion) in revenue, the new company will play a key role in the automotive industry entering a new era of electrification. Is expected.

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Stellantis has 14 brands, from FCA’s Fiat, Maserati and US-focused Jeep, Dodge and Lamb to PSA’s traditional European-focused Peugeot, Citroen, Opel and DS.

FCA and PSA said they plan to close the partnership on January 16th, ahead of previous signs of closing within the first quarter of this year.

The shares of Stellantis will open in Milan and Paris on January 18th and in New York the next day, the two automakers said in a joint statement.

At two separate extraordinary shareholders’ meetings held almost early Monday for the coronavirus pandemic, investors in each group supported the merger with an approval rate of over 99% of the votes cast.

“We are ready for this merger,” said Carlos Tavares, PSA CEO and future CEO of Stellantis.

Tavares needs to revive the fate of car makers in China, rationalize the vast empire, deal with large overcapacity and focus on making cars cleaner like rivals.

FCA Chairman John Elkann, future chairman of Stellantis, said the new carmaker “will play a leading role in redefining mobility in the next decade.”

Mike Manley, CEO of FCA, which oversees Stellantis’ key North American operations, said 40% of the synergies from the merger, which is estimated to be over € 5 billion, will be in platform and powertrain integration and R & D investment. He said it was due to optimization.

According to Manly, 35% of the synergies are from purchase savings and the remaining 7% are from sales and general expense savings.

He added that the remaining synergies are expected from optimizations of other features such as logistics, supply chain, quality and aftermarket operations.

The FCA said in another statement that it would pay shareholders a special dividend of € 2.9 billion as soon as the merger was completed.
PSA and FCA have promised not to close the factory.

Fiat Chrysler, Peugeot Get Green Light For $ 52 Billion Carmaker Fiat Chrysler, Peugeot Get Green Light For $ 52 Billion Carmaker

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