Green Light for the Marriage of Peugeot And Fiat

Peugeot and Fiat shareholders intend to validate today the union of the two groups, a French-Italian-American marriage designed to reach a critical size in a car market in full revolution.

The union of the French groups PSA and the Italian-American FCA will create the fourth largest company in the world in number of vehicles sold and the third in turnover, behind the Japanese Toyota and the German Volkswagen.

The new entity, called Stellantis, will have more than 400,000 employees and will house in the same garage 14 emblematic brands such as Citroon and Maserati (already briefly married 50 years ago), Fiat and Opel, Peugeot and Alfa Romeo, Chrysler, Dodge or Jeep .

The group’s brands will in particular reduce their development and construction costs, and complete their offer in all ranges.

No great suspense in France this Monday: PSA shareholders have already voted in June 2020 by more than 99% in favor of four resolutions marking their support for the marriage of the Fiat 500 and the Peugeot 208.

But their vote will seal this union envisaged since 2018, announced at the end of 2019, and whose preparation was slowed down by the coronavirus crisis.

At the end of December, the European Commission gave the green light to the union, on condition that the two groups respect their commitments made to preserve competition in small utilities, where they hold large market shares.

The builders had previously amended their contract so that their union remains a marriage of equals, while the pandemic has affected their respective accounts.

FCA has notably agreed to lower the amount of an exceptional dividend paid to its shareholders. For its part, PSA has decided to sell 7% of the French equipment manufacturer Faurecia before distributing the rest to the shareholders of Stellantis. The participation of the Chinese group Dongfeng should also be reduced.

This is insufficient according to the Phitrust fund, which holds less than 1% of the capital of PSA and criticizes since the announcement of the merger a lack of “balance between the parties” for the benefit of  the Italian-Americans.

In the documents provided to the financial authorities, PSA and Fiat estimate that their merger should cost 4 billion euros, and that the synergies will ultimately save up to 5 billion per year.

Carlos Tavares stressed at the end of 2019 that no plant closures were planned. The unions allow themselves to doubt it.

 

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Peugeot And Fiat Create the Stellantis Group - /10

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