This is called a “big wedding”. The PSA and FCA groups officially unite this Saturday to form the Stellantis group. Fiat, Opel, Peugeot, Alfa Romeo, Chrysler, Dodge, Jeep and Maserati vehicles will now leave the factories of the world’s fourth largest automobile group. In total, the group’s 14 brands represent around 9% of the global market, for 8 million vehicles sold in 2019. “We will play a leading role over the next decade by redefining mobility as our founding fathers said. done with a lot of energy “, had assured the president of FCA John Elkann in early January, evoking a” historic merger “.
Next Monday, the leaders of the new group must launch the Stellantis share (“strewn with stars” in Latin) on the markets of the Milan and Paris stock exchanges, then Tuesday on the New York Stock Exchange. Then on Tuesday, the former chairman of the board of PSA and new CEO of Stellantis Carlos Tavares will unveil his vision for the group of 400,000 employees, before presenting his strategic plan in the coming months.
Better global coverage
The challenges are numerous, between the electrification of the ranges, motorists who turn to second-hand or rental and the health crisis that weighs on the manufacture and sales of vehicles. Global sales of PSA (Peugeot, Citroën, DS, Opel, Vauxhall) tumbled 27.8% in 2020.
Matthias Heck, of Moody’s, sees the merger favorably because the groups “improve their global coverage, can collaborate technologically and in various segments and will realize savings thanks to the synergies and the experience of PSA , which was able to set the right price and manage its costs ”. PSA and Fiat-Chrysler have estimated that the synergies would ultimately save up to 5 billion euros per year, in both manufacturing costs and research. Economies that worry unions and states alike.
Rome like Paris?
After opposing a Fiat marriage to Renault, the French government has greeted with the Italian government the birth of Stellantis. However, on both sides of the Alps, care will be taken to ensure that the new colossus “also contributes to industrial employment in Italy and France”, assured the French Minister of the Economy, Bruno Le Maire, and his Italian counterpart in early January, Stefano Patuanelli. To keep control, Italy is even considering taking a stake in Stellantis: “a possible presence of the State in the share capital of the new group, similar to that of the French government, cannot and should not be taboo. “, Italian Deputy Minister of Economy Antonio Misiani told the newspaper La Repubblica. The French State has a 6.2% stake in Stellantis.
To successfully complete this merger while respecting competition rules, the two groups have reduced their dominance in the small utility sector. They also amended their contract so that their union remains a marriage of equals. FCA has lowered the amount of an exceptional dividend paid to its shareholders, from 5 to 2.9 billion euros. PSA has withdrawn from the equipment manufacturer Faurecia.
As for the unions, the majority accompanied a merger that they considered inevitable. But they remain on their guard. “See you in a year,” summarized the FO delegate to PSA, Olivier Lefebvre. “Our confidence in the future will obviously be accompanied throughout the year by vigilance on the adequacy of social and industrial policies”.
The planned synergies are also of concern to the equipment manufacturers who supply the two groups. “Challenges are to be expected but also opportunities,” Claude Cham, president of the federation of equipment manufacturers (FIEV), told AFP. “In both cases, international equipment manufacturers will be in the best position to meet the demands. The smallest and the least international and diversified are the most at risk ”.