MILAN (Reuters) – Fiat Chrysler and PSA will seal their long-awaited merger on Saturday to create Stellantis, the world’s fourth-largest car group with pockets deep enough to fund the switch to electric driving and face bigger rivals Toyota and Volkswagen .
It took more than a year for Italian-American and French carmakers to finalize the $ 52 billion deal, during which the world economy was hit by the COVID-19 pandemic. They first announced their merger plans in October 2019, to create a group with annual sales of about 8.1 million vehicles.
The shares of Stellantis, which will be headed by current PSA executive Carlos Tavares, will begin trading in Milan and Paris on Monday and Tuesday in New York.
Analysts and investors are now focusing their focus on how Tavares plans to address the major challenges facing the group – from overcapacity to poor performance in China.
Tavares will hold his first press conference as CEO of Stellantis on Tuesday, after ringing the NYSE bell with President John Elkann.
FCA and PSA have said Stellantis can reduce annual costs by more than 5 billion euros ($ 6.1 billion) without plant closures and investors will be eager for more details on how it will do so.
Marco Santino, a partner at consultants Oliver Wyman, said he hoped Tavares would soon reveal the outlines of his action plan, but without divulging too many details at first.
“He’s proven to be the kind of person who prefers action to words, so I don’t think he makes sound statements or tries to over-sell targets,” he said.
Like all global automakers, Stellantis has to invest billions in the coming years to transform its range of vehicles for the electric age.
But other urgent tasks appear, such as reviving the group’s backward fortunes in China, streamlining its huge world empire, and tackling massive overcapacity.
“It will be a step-by-step process, also to allow the market to better appreciate each movement. I don’t think we have all the details before a year, “said Santino.
FCA CEO Mike Manley, who will lead Stellantis’ main US operations, said 40% of the manufacturer’s expected synergies would come from the convergence of platforms and transmissions and the optimization of investments in R + D, 35% savings on purchases and another saving on sales operations and general expenses.
($ 1 = $ 0.8226)
Report by Giulio Piovaccari. Edited by Mark Potter