Flag with the Stellantis logo on the front entrance of the FCA factory in Mirafiori on January 18, 2021 in Turin, Italy.
Stefano Guidi | Getty Images
LONDON – Stellantis, the product of a $ 52 billion merger between Fiat Chrysler Automobiles and Peugeot, was well received by European investors on Monday’s first trading day.
Shares of the world’s fourth-largest automaker, created after the merger was completed on Saturday, rose 7.5% in the afternoon after launching on the Milan and Paris stock exchanges.
Shares in Milan began trading at € 12,758 per share, with a market cap of € 39.2 billion ($ 47.3 billion), and by the afternoon bids in Europe had risen by 13, 55 euros per share.
In a virtual launch on the Borsa Italiana website, Stellantis CEO Carlos Tavares, former CEO of PSA Group, said the merger will add 25 billion euros to shareholders in the coming years due to projected cost reductions.
“All of our employees and our management teams are fully focused on creating value that is embedded in the FCA-PSA merger and the creation of Stellantis,” he added.
President John Elkann said the next decade would “redefine mobility as we know it”.
“We have the scope, the resource, the diversity and the knowledge to successfully capture the opportunity of this new era in transportation,” he said.
“Our ambition is to build something unique, something great, offering our customers distinct, safe, convenient, innovative and sustainable vehicles and mobility services.”
The shares will be launched in New York when Wall Street opens on Tuesday, with US markets closed 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 connection talks that began in late 2018 and comes as the auto industry tries to navigate a seismic shift in consumer demand for electric vehicles.
Prior to trading, S&P Global Ratings upgraded the FCA’s credit rating, predicting that Stellantis would benefit from increased scale and geographic diversity and a strong capital structure.
“The combined entity will have a solid balance sheet, good prospects for 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 be around € 14 billion on an unadjusted basis. This will give the group a considerable buffer for market conditions, which remain exposed to the risks of restricting mobility related to COVID-19 in the first half of 2021 and could suffer from the gradual reduction of government support. “