MILAN (Reuters) – Fiat Chrysler and PSA to seal long-awaited merger on Saturday to create Stellantis, the world’s fourth-largest car group with pockets deep enough to fund the switch to power and take on bigger rivals Toyota and Volkswagen.
It took more than a year for Italian-American and French carmakers to complete the $ 52 billion deal, during which time the global economy was overthrown by the COVID-19 pandemic. They first announced merger plans in October 2019, to create a group with annual sales of approximately 8.1 million vehicles.
The shares in Stellantis, which will be led by the current executive director of PSA, Carlos Tavares, will start trading in Milan and Paris, on Monday, and in New York, on Tuesday.
Now, analysts and investors are turning their attention to how Tavares intends to address the huge challenges facing the group – from overcapacity to deplorable performance in China.
Tavares will hold his first press conference as CEO of Stellantis on Tuesday, after calling the NYSE with President John Elkann.
The FCA and PSA have said that Stellantis can reduce annual costs by more than 5 billion euros ($ 6.1 billion) without closing plants, and investors will want more details on how to do so.
Marco Santino, a partner at consultants Oliver Wyman, said he expected Tavares to reveal the outlines of his action plan soon, but without revealing too many details at first.
“He turned out to be the kind of person who prefers action to words, so I don’t think he’ll make loud statements or try to over-sell targets,” he said.
Like all global automakers, Stellantis must invest billions in the coming years to transform its range of electric vehicles.
But other pressing tasks are planned, including reviving China’s remaining wealth in China, streamlining its huge global empire and tackling massive overcapacity.
“It will also be a step-by-step process to allow the market to better appreciate each move. I don’t think we will have all the details before a year “, said Santino.
FCA CEO Mike Manley – who will lead Stellantis’ key North American operations – said 40% of the carmaker’s expected synergies will come from the convergence of platforms and powertrains and the optimization of investment in research and development , 35% of savings on purchases and another 7% of savings on sales operations and general expenses.
($ 1 = $ 0.8226)
Reporting by Giulio Piovaccari. Edited by Mark Potter