Shareholders vote to approve PSA merger with Fiat Chrysler
Fiat Chrysler Automobiles and Groupe PSA, the French car maker Peugeot and Citroën, expect their merger to be completed on January 16. The newly merged company will be called Stellantis and will become the fourth largest automaker in the world..
Shareholders of both companies overwhelmingly approved the merger on Monday, auto makers said..
Fiat Chrysler (FCAU) manufactures car brands Chrysler, Dodge, Ram, Jeep, Fiat, Alfa Romeo, Maserati and Lancia. Meanwhile PSA produces Peugeot, Citro carsën, DS, Opel and Vauxhall.
Upon completion of the merger, the combined company will become the fourth largest automaker in the world, said Jeff Schuster (Jeff Schuster), Analyst at LMC Automotive. The total value of the companies is estimated at $ 57 billion.
In 2019, the two companies sold a total of 8 million vehicles, compared to Volkswagen (VLKPF), which sold around 11 million vehicles this year..
While Fiat Chrysler and PSA compete in Europe, PSA has virtually no presence in the US, where Fiat Chrysler is the country’s fourth-largest automaker in terms of sales. However, both companies have struggled to compete in China’s fast-growing auto market, Schuster said. According to him, the merger will not immediately help them in this, so it will remain a challenge for the newly formed company..
Although the two companies do indeed compete with each other in Europe, Schuster said their brands have slightly different market positions..
«And I think PSA has experience [in electric vehicles] that FCA does not have, ”he said,“ so there is a good synergy here.».
According to Michelle Krebs (Michelle Krebs), Cox Automotive Analyst, New Company Formation Will Help Free Up Resources As It Shifts To Electric And Autonomous Vehicle Technology.
«The creation of Stellantis is just a large-scale example of a major trend we are seeing in the automotive business right now, as all major automakers face the monumental challenge of transforming their businesses with an eye toward 2030, when EV and autonomous technology must move from emerging to mainstream», – she said.
Stellantis will begin trading on the Paris and Milan stock markets on Monday 18 January and on the New York Stock Exchange the next day..
The companies said the merger requires some final regulatory approvals, including from the European Union and the European Central Bank..