Fiat Chrysler, PSA expect to seal merger on Jan. 16
Fiat Chrysler Automobiles and PSA Group said that investors had approved their $52 billion merger, and that shares in the new company, named Stellantis, would start trading in two weeks.
With annual production of about 8 million vehicles worldwide and revenues of more than 165 billion euros ($203 billion), Stellantis is expected to play a key role in the auto industry’s jump into the new era of electrification.
Stellantis will have 14 brands, from FCA’s Fiat, Maserati and U.S.-focused Jeep, Dodge and Ram to PSA’s Peugeot, Citroen, Opel and DS. PSA has traditionally been more focused on Europe.
FCA and PSA said they expected to complete their tie-up on Jan. 16, ahead of an earlier indication which aimed for a closing within the first quarter of this year. Stellantis shares will start trading in Milan and Paris on Jan. 18, and in New York the following day, the two automakers said in a joint statement.
At two separate extraordinary shareholder meetings, held virtually on Monday due to the coronavirus pandemic, investors in each group backed the merger with approval rates above 99 percent of votes cast.
“We are ready for this merger,” PSA CEO Carlos Tavares said.
Tavares, who will become the CEO of Stellantis, said the deal had now passed all regulatory tests.
Tavares will have to revive the automaker’s fortunes in China where FCA and PSA are weak, rationalize a sprawling global empire and address massive overcapacity, as well as focus on creating cleaner cars.
FCA Chairman John Elkann, the future chairman of Stellantis, said the new automaker would “play a leading role as the next decade redefines mobility.”
FCA CEO Mike Manley said 40 percent of the expected synergies form the merger — projected at more than 5 billion euros, will come from convergence of platforms and powertrains and from optimizing R&D investments. Manley will head Stellantis’ key north American operations,
Manley said 35 percent of synergies would be driven by savings on purchases, while another 7 percent would come from savings on sales operations and general expenses. The remainder of the synergies are expected from the optimization of other functions including logistics, supply chain, quality and after-market operations, he said.
FCA said in a separate statement it would pay its shareholders a planned 2.9 billion euro special dividend as soon as possible after merger completion.