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

MILAN (Reuters) - Fiat Chrysler and PSA will seal their long-awaited merger on Saturday to create Stellantis, the world's fourth-largest auto group with deep enough pockets to fund the shift to electric driving and take on bigger rivals Toyota and Volkswagen. It took over a year for the Italian-American and French automakers to finalise the $52 billion deal, during which the global economy was upended by the COVID-19 pandemic

Reuters January 16, 2021 06:05:40 IST
After long journey, Fiat Chrysler and PSA to seal merger to become Stellantis

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

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

It took over a year for the Italian-American and French automakers to finalise the $52 billion deal, during which the global economy was upended by the COVID-19 pandemic. They first announced plans to merge in October 2019, to create a group with annual sales of around 8.1 million vehicles.

Shares in Stellantis, which will be headed by current PSA Chief Executive Carlos Tavares, will start trading in Milan and Paris on Monday, and in New York on Tuesday.

Now analysts and investors are turning their focus to how Tavares plans to address the huge challenges facing the group – from excess production capacity to a woeful performance in China.

Tavares will hold his first press conference as Stellantis CEO on Tuesday, after ringing NYSE's bell with Chairman John Elkann.

FCA and PSA have said Stellantis can cut annual costs by over 5 billion euros ($6.1 billion) without plant closures, and investors will be keen for more details on how it will do this.

Marco Santino, a partner at consultants Oliver Wyman, said he expected Tavares to disclose the outlines of his action plan soon, but without divulging too many details at first. "He has proven to be the kind of person who prefers action to words, so I don't think he will make loud statements or try to over-sell targets," he said.

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

But other pressing tasks loom, including reviving the group's lagging fortunes in China, rationalising its huge global empire and addressing massive overcapacity.

"It will be a step by step process, also to allow the market better appreciate every single move. I don't think we will have all the details before one year," Santino said. FCA CEO Mike Manley - who will head Stellantis' key North American operations - has said 40% of the carmaker's expected synergies would come from convergence of platforms and powertrains and from optimising R&D investments, 35% from savings on purchases, and another 7% from savings on sales operations and general expenses.

($1 = 0.8226 euros)

(Reporting by Giulio Piovaccari. Editing by Mark Potter)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.