It is sealed: Peugeot and Fiat-Chrysler merge and reveal what will be the name of this new group | Economy



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The shareholders of Peugeot and Fiat-Chrysler (FCA) on Monday validated their union, a “Franco-Italian-American wedding” conceived to reach a critical size in a car market in full revolution.

The union of the French groups PSA and Italian-American FCA will create Stellantis, he fourth world automobile group in number of vehicles sold and third in business volume behind the Japanese Toyota and german Volkswagen.

After the vote of PSA shareholders this Monday morning, FCA shareholders, meeting in a general meeting, voted in the afternoon in favor of the merger project.

The union will be effective on Saturday January 16, the two groups specified. Stellantis will be listed as of Monday the 18th in Paris and Milan, and on the New York Stock Exchange as of Tuesday the 19th.

The new entity will have more than 400,000 employees and will house 14 emblematic brands such as Citroën and Maserati, Fiat and Opel, Peugeot and Alfa Romeo, Chrysler, Dodge or Jeep.

“I have never wanted so much to experience a moment in history as today,” said the chairman of the PSA supervisory board, Louis Gallois, who is retiring after this merger.

“We will have a leading role in the next decade in redefining mobility as our founding fathers did with great energy,” said FCA President John Elkann, referring to a “historic merger.”

“This merger was a matter of survival for both Fiat and PSA ”, according to Giuliano Noci, professor of strategy at the Milan Polytechnic School of Commerce.

Group brands in particular reduce your development and manufacturing costs and they will complete your offer in all ranges.

“Thanks to its union with PSA, Fiat-Chrysler will be able to strengthen its presence in Europe,” says Giuseppe Berta, professor at Bocconi University in Milan and a Fiat specialist. “Instead, the French group will once again be able to set foot in the United States thanks to its Italian-American ally.”

A modified merge

The shareholders’ vote seals a union planned since 2018, announced at the end of 2019, and whose preparation was hampered by the coronavirus crisis.

In December, European Commission gave the green light to the union, on the condition that the two groups preserve competition in the small utility sector, where they control large market shares.

The manufacturers had previously modified their contract so that their union is a marriage between equals, while the pandemic hit their respective accounts.

FCA agreed to reduce the amount of an exceptional dividend paid to its shareholders. For its part, PSA decided to sell 7% of French equipment manufacturer Faurecia before distributing the remainder to Stellantis shareholders. The stake of the Chinese Dongfeng group will also be reduced.

It is insufficient, says the Phitrust fund, which has less than 1% of PSA’s capital and criticizes a lack of “balance between the parties” that favors Italian-Americans.

Will there be plant closings?

In the documents to the financial authorities, PSA and Fiat consider that their approach will cost 4,000 million euros (4,900 million dollars), and that the synergies will save up to 5,000 million over time ($ 6.13 billion) a year.

The chairman of the PSA board of directors and future CEO of the new group, Carlos Tavares, said at the end of 2019 that no plant closures were planned. The unions, however, doubt it.

“Globally it is good insurance for the future of our group. Those who do not take this curve run the risk of being left behind ”, says Franck Don, delegate of the CFTC union of PSA.

“Today, the FCA group is a great unknown for us,” says the unionist. What synergies will there be? What potential consequences for plants located in France? ”

The Phitrust fund, however, warns that Fiat has no room for maneuver in Italy, where it has obtained a loan guaranteed by the State of 6,000 million euros. “The French PSA factories may become the variable of the adjustments, generating strong job losses,” warns the fund.



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