FCA and PSA complete merger to form Stellantis
The proposed merger between Fiat Chrysler Automobiles and Groupe PSA has been completed, with all the necessary regulatory and legal processes having been completed. This comes after plans for the merger were first announced in October 2019, but the economic downturn that came with the COVID19 pandemic delayed proceedings.
With this merger, Stellantis is valued at USD 52 billion and is now the world's fourth-largest carmaker with sales of over 8.1 million vehicles a year. Stellantis will be a Dutch-registered entity with its shares trading on the Paris and New York stock exchanges. PSA CEO Carlos Tavares will be merged entity's CEO and FCA Chairman John Elkann will be its Chairman.
The combined entity expects to save up to USD 6. billion a year in costs. These savings will come with co-developed platforms and engines, a combined focus on research and development and from streamlining spending on supplies and sales. A stronger financial position will also help the two firms in the heavy investments it needs to make to stay relevant in the car industry, with the steady shift to EVs calling for the development of electric architectures, and rapid growth in safety and connectivity tech. Stellantis will also be in a stronger position to tackle markets where the two firms haven't had great success in the past. In the case of the PSA group, this will be North America, while the lucrative Indian and Chinese have been difficult markets to crack for both firms.
PSA CEO Carlos Tavares said that the combine had no plans to scrap any of the brands that fall under the groups. Groupe PSA owns the Peugeot, Citroen, DS, Opel and Vauxhall brands. FCA owns Abarth, Fiat, Alfa Romeo, Maserati, Lancia, Chrysler, Dodge, Jeep, Ram, SRT, among others. Although Stellantis will have to manage excessive plant capacity and rationalize its global product portfolio. In India's case, Stellantis already has a presence through the Jeep and Fiat brands, with PSA Group's Citroen making its debut next month.
