Flag with the Stellantis logo at the main entrance of the FCA Mirafiori plant on January 18, 2021 in Turin, Italy.
Stefano Guidi | Getty Images
LONDON – Stellantis, the product of the $ 52 billion merger between Fiat Chrysler Automobiles and Peugeot, was well received by European investors on the first trading day on Monday.
Shares of the world’s fourth-largest vehicle maker in volume, created after the completion of the merger on Saturday, rose 7.5% for afternoon trading after its launch on the Milan and Paris stock exchanges.
Shares listed in Milan began trading at 12,758 euros per share, with a market capitalization of 39.2 billion euros ($ 47.3 billion), and in the afternoon operations in Europe increased to 13.55 euros per share.
In a virtual launch on the Borsa Italiana website, Stellantis CEO Carlos Tavares, former CEO of the PSA group, said the merger would add 25 billion euros to shareholders over the next few years due to cost cuts planned.
“All of our employees and our management teams are fully focused on the value creation that is included in the FCA-PSA merger and the creation of Stellantis,” he added.
President John Elkann said the next decade would likely “redefine mobility as we know it.”
“We have the scale, the resource, the diversity and the knowledge to successfully seize the opportunity of this new era in transportation,” he said.
“Our ambition is to build something unique, great, providing our customers with distinctive, safe, convenient, innovative and sustainable mobility vehicles and services.”
Shares will launch in New York when Wall Street opens on Tuesday, and U.S. markets will close on Monday for a public holiday, after which Tavares will hold his first press conference as CEO of Stellantis.
The launch marked the culmination of the bond talks that began in late 2018 and are taking place as the auto industry tries to make a seismic shift in consumer demand for electric vehicles.
Prior to the deal, S&P Global Ratings upgraded FCA’s credit rating and predicted that Stellantis would benefit from greater geographic and scale diversity and a strong capital structure.
“The combined entity will have a solid balance sheet, good prospects of free cash flows and a large liquidity buffer,” S&P analysts Vittoria Ferraris and Margaux Pery said in a note.
“In our base case, Stellantis’ net cash position will fluctuate to 14 billion euros in an unadjusted manner. This will provide the group with a considerable buffer for market conditions, which remain exposed to the risks of restriction. linked to COVID-19 during the first half of 2021 and could suffer a gradual reduction in government support. “