Home Actualité internationale World News – AU – PSA and Fiat Chrysler approach a mega-merger
World News – AU – PSA and Fiat Chrysler approach a mega-merger
(Updated:
The 50/50 peg delayed by the COVID-19 pandemic is seen as critical for the two groups to make massive investments in clean auto tech. [Groupe PSA]
On Monday (4. January) blessed a merger between automakers PSA and Fiat Chrysler that catapults new company Stellantis into fourth place worldwide as the auto industry races to transition to cleaner cars.
Merger resolutions were passed almost unanimously at PSA's annual general meeting, said PSA boss Carlos Tavares, who will take over the helm of the new company.
Fiat Chrysler shareholders later gave similar support, and the two groups said the merger would be completed by Jan.. January would be completed.
John Elkann, Fiat chairman and offspring of the famous Italian Agnelli family, will continue his role at Stellantis in what he describes as « challenging ». "
« The coming decade will redefine mobility: we want to play a leading role in building this new future, » said Elkann after the vote.
The green light from the shareholders was generally taken for granted two weeks after the European Commission conditionally approved the transaction announced in late 2019.
The 50/50 peg delayed by the COVID-19 pandemic is seen as critical for the two groups to make massive investments in clean auto tech.
It also allows Fiat to strengthen its presence in its main European markets, while the French group will gain a foothold in the US.
« It's a very good operation, » said EU Internal Market Commissioner Thierry Breton to the French television channel BFM Business, and welcomed the emergence of « very large European groups ». .
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« The ability to invest in research and development in each other is very important, » he said. But the market is changing « and we must not be left behind, » he said.
« This merger is a matter of survival for both Fiat and PSA, » said Giuliano Noci, professor of strategy at the Milan Business School.
The deal combines PSA's Peugeot, Citroen, Opel and other brands with the Fiat Chrysler stable, which also includes the brands of the same name as well as Jeep, Alfa Romeo and Maserati.
Stellantis and his over 400. According to the number of cars sold, there will be 000 employees behind Volkswagen, the Renault-Nissan-Mitsubishi alliance and Toyota.
But it will be the third largest automaker by sales, testament to its efforts to convince buyers to pay more for their cars.
The shareholders of the French PSA and the US-Italian rival Fiat Chrysler are expected on Monday (4. January) approve their merger. This creates Stellantis, the fourth largest automaker in the world.
« Only the most agile with a Darwinian spirit will survive, » warned PSA boss Tavares last November.
The European Commission feared that the merger could affect competition in the lucrative European van market. PSA and Fiat Chrysler together account for 34% of the market share.
To address those concerns, the Commission said PSA will continue an agreement with Toyota to manufacture vans to be sold in Europe under the Japanese brand.
The disruption caused by COVID-19, which shut down production for several weeks in early 2020, forced PSA and Fiat to change the terms of their collaboration to ensure it was a merger on equal terms.
The FCA agreed to cut an exceptional dividend for its shareholders, while PSA agreed to share its 46% stake in French auto equipment maker Faurecia with all shareholders in the new company, rather than just as previously agreed.
Fiat Chrysler posted a net profit of € 1. 2 billion for the third quarter compared to a loss of € 1. 04 billion in the second quarter – as auto sales fell, much of the world was in coronavirus lockdown.
PSA shares were 1. 6% higher at 22 €. 67 on late Paris trading Monday, while Fiat Chrysler shares rose 1 in Milan. 3% at € 14. 85.
The European Commission announced on Monday (21. December) a collaboration between the Italian-American car maker Fiat-Chrysler and the French manufacturer Peugeot approved. However, several concerns were identified in Brussels, which companies have committed to addressing.
PSA sold 589 in the third quarter. 000 fewer vehicles but sold them for more money as part of a strategy to maximize profitability and cash flow that increased sales by 1. 2%.
When the merger was announced, Tavares assured that no plant would be closed, but the unions in France remain skeptical.
"Overall, it is a good insurance policy for the future of our group. Those who don't make the shift run the risk of being left behind, "said Franck Don, a CFTC union representative at PSA.
But he asked himself: « What synergies will you find and what consequences will this have for locations in France? »
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Fiat Chrysler Automobiles, Groupe PSA, Auto Industry, Carlos Tavares, Peugeot, Mergers and Acquisitions
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